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Health Insurance Coverage and the Macroeconomy

  • John Cawley
  • Kosali I. Simon

The primary objective of this paper is to improve our understanding of the historic relationship between state and national macroeconomic climate and the health insurance coverage of Americans. The secondary objective of this paper is to use the historic findings to estimate how the number of uninsured Americans changed during the 2001 recession, and to estimate whether to date enough people have gained health insurance during the current recovery to offset the losses during the recession. We conclude that the macroeconomy (measured by state unemployment rate and real gross state product) is correlated with the probability of men's health insurance coverage and that this correlation is only partly explained by changes in men's employment status. Counter-cyclical health insurance programs such as Medicaid and the State Children's Health Insurance Program seem to ensure that the health insurance coverage of women and children is insulated from macroeconomic changes. We estimate that 851,000 Americans, the vast majority of whom were adult men, lost health insurance due to macroeconomic conditions alone during the 2001 recession.

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File URL: http://www.nber.org/papers/w10092.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10092.

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Date of creation: Nov 2003
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Publication status: published as Cawley, John, and Kosali I. Simon. "Health Insurance Coverage and the Macroeconomy." Journal of Health Economics, March 2005, 24(2): 299-315.
Handle: RePEc:nbr:nberwo:10092
Note: HE
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  1. Roger Feldman & Bryan Dowd & Scott Leitz & Lynn A. Blewett, 1997. "The Effect of Premiums on the Small Firm's Decision to Offer Health Insurance," Journal of Human Resources, University of Wisconsin Press, vol. 32(4), pages 635-658.
  2. Sherry Glied & Kathrine Jack, 2003. "Macroeconomic Conditions, Health Care Costs, and the Distribution of Health Insurance," NBER Working Papers 10029, National Bureau of Economic Research, Inc.
  3. David M. Cutler, 2003. "Employee Costs and the Decline in Health Insurance Coverage," NBER Chapters, in: Frontiers in Health Policy Research, Volume 6, pages 27-54 National Bureau of Economic Research, Inc.
  4. Ruhm, Christopher J., 1995. "Economic conditions and alcohol problems," Journal of Health Economics, Elsevier, vol. 14(5), pages 583-603, December.
  5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  6. Ruhm, Christopher J., 2003. "Good times make you sick," Journal of Health Economics, Elsevier, vol. 22(4), pages 637-658, July.
  7. Janet Currie & Jonathan Gruber, 1995. "Health Insurance Eligibility, Utilization of Medical care, and Child Health," NBER Working Papers 5052, National Bureau of Economic Research, Inc.
  8. Christopher J. Ruhm, 1996. "Are Recessions Good For Your Health?," NBER Working Papers 5570, National Bureau of Economic Research, Inc.
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