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How Much Does Health Insurance Cost? Comparison of Premiums in Administrative and Survey Data

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  • Jeff Larrimore
  • David Splinter

Abstract

Using newly available administrative data from the Internal Revenue Service, this paper studies the distribution of employer-sponsored health insurance premiums. Previous estimates, in contrast, were almost exclusively from household surveys. After correcting for coverage limitations of the IRS data, we find that average premiums for employer-sponsored plans are roughly $1000 higher in IRS records than in the Current Population Survey. The downward bias in the CPS is largely driven by underestimating of premiums among married workers and topcoding of high premiums.

Suggested Citation

  • Jeff Larrimore & David Splinter, 2018. "How Much Does Health Insurance Cost? Comparison of Premiums in Administrative and Survey Data," Finance and Economics Discussion Series 2018-030, Board of Governors of the Federal Reserve System (US).
  • Handle: RePEc:fip:fedgfe:2018-30
    DOI: 10.17016/FEDS.2018.030
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    File URL: https://www.federalreserve.gov/econres/feds/files/2018030pap.pdf
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    References listed on IDEAS

    as
    1. Burtless Gary & Svaton Pavel, 2010. "Health Care, Health Insurance, and the Distribution of American Incomes," Forum for Health Economics & Policy, De Gruyter, vol. 13(1), pages 1-41, February.
    2. Katherine Baicker & Amitabh Chandra, 2006. "The Labor Market Effects of Rising Health Insurance Premiums," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 609-634, July.
    3. repec:spr:demogr:v:55:y:2018:i:4:d:10.1007_s13524-018-0692-5 is not listed on IDEAS
    4. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, Oxford University Press, vol. 133(2), pages 553-609.
    5. Kolstad, Jonathan T. & Kowalski, Amanda E., 2016. "Mandate-based health reform and the labor market: Evidence from the Massachusetts reform," Journal of Health Economics, Elsevier, vol. 47(C), pages 81-106.
    6. The Food Industry Center, University of Minnesota, 2018. "The Food Industry Center 2018 Annual Report," Annual Reports 280379, University of Minnesota, The Food Industry Center.
    7. Burkhauser, Richard V. & Larrimore, Jeff & Simon, Kosali I., 2012. "A "Second Opinion" on the Economic Health of the American Middle Class," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 7-32, March.
    8. Hubert Janicki & Brett O’Hara & Alice Zawacki, 2013. "Comparing Methods For Imputing Employer Health Insurance Contributions In The Current Population Survey," Working Papers 13-41, Center for Economic Studies, U.S. Census Bureau.
    9. Bollinger, Christopher R. & Hirsch, Barry & Hokayem, Charles M. & Ziliak, James P., 2018. "Trouble in the Tails? What We Know about Earnings Nonresponse Thirty Years after Lillard, Smith, and Welch," IZA Discussion Papers 11710, Institute of Labor Economics (IZA).
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    More about this item

    Keywords

    CPS ; Employer Sponsored Health Insurance ; IRS data ; Topcoding;

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • D3 - Microeconomics - - Distribution

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