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Labor Market Implications of State Small Group Health Insurance Reform

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  • Kanika Kapur

Abstract

Small group health insurance reforms such as portability reform and premium rating reforms that limit the use of health status in setting premiums have been implemented in more than 40states. The author determines the impact of these reforms on employment outcomes of individuals with high expected health costs. The effects of these reforms are mixed—the effect of the reforms on small firm hiring and job mobility of costly subgroups is often statistically insignificant. There is some suggestive evidence that rating reforms increase job mobility for the sick. However, rating reforms may redistribute health insurance costs from the sick to the old and, as a result, reduce employment opportunities for the old. Portability reform that aims to reduce job-lock does have a positive effect on job mobility; however, on the whole, the results suggest that the effect of the full package of reforms on job mobility is likely to be small.

Suggested Citation

  • Kanika Kapur, 2003. "Labor Market Implications of State Small Group Health Insurance Reform," Public Finance Review, , vol. 31(6), pages 571-600, November.
  • Handle: RePEc:sae:pubfin:v:31:y:2003:i:6:p:571-600
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    Cited by:

    1. Kanika Kapur & José J. Escarce & M. Susan Marquis & Kosali I. Simon, 2005. "Where do the sick go? Health insurance and employment in small and large firms," Open Access publications 10197/259, School of Economics, University College Dublin.
    2. Kanika Kapur & Pinar Karaca‐Mandic & Susan M. Gates & Brent Fulton, 2012. "Do Small‐Group Health Insurance Regulations Influence Small Business Size?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(1), pages 231-260, March.
    3. Anna Sanz De Galdeano, 2004. "Health Insurance and Job Mobility: Evidence from Clinton's Second Mandate," CSEF Working Papers 122, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    4. Kanika Kapur & José J. Escarce & M Susan Marquis & Kosali I. Simon, 2008. "Where Do The Sick Go? Health Insurance and Employment in Small and Large Firms," Southern Economic Journal, Southern Economic Association, vol. 74(3), pages 644-664, January.

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