Search Results
Working Paper
Health Shocks, Health Insurance, Human Capital, and the Dynamics of Earnings and Health
We specify and calibrate a life-cycle model of labor supply and savings incorporating health shocks and medical treatment decisions. Our model features endogenous wage formation via human capital accumulation, employer-sponsored health insurance, and means-tested social insurance. We use the model to study the effects of health shocks on health, labor supply and earnings, and to assess how health shocks contribute to earnings inequality. We also simulate provision of public insurance to agents who lack employer-sponsored insurance. The public insurance program substantially increases medical ...
Working Paper
Advertising and Risk Selection in Health Insurance Markets
We study impacts of advertising as a channel of risk selection in Medicare Advantage. We show evidence that both mass and direct mail advertising are targeted to achieve risk selection. We develop and estimate an equilibrium model of Medicare Advantage with advertising to understand its equilibrium impacts. We find that advertising attracts the healthy more than the unhealthy. Moreover, shutting down advertising increases premiums by up to 40% for insurers that advertised by worsening their risk pools, which further reduces the demand of the unhealthy. We argue that risk selection may make ...
Working Paper
Health Insurance and Young Adult Financial Distress
We study the financial effects of health insurance for young adults using the Affordable Care Act’s dependent coverage mandate as a source of exogenous variation. Using nationally repre-sentative, anonymized credit report and publicly available survey data on medical expenditures, we exploit the mandate’s implementation in 2010 and its automatic disenrollment mechanism at age 26. Our estimates show that increasing access to health insurance lowered young adults’ out-of-pocket medical expenditures, debt in third-party collections, and the probability of per-sonal bankruptcy. However, ...
Working Paper
Health-care reform or labor market reform? A quantitative analysis of the affordable care act
An equilibrium model with firm and worker heterogeneity is constructed to analyze labor market and welfare implications of the Patient Protection and Affordable Care Act, commonly called the Affordable Care Act (ACA). The authors? model implies a significant reduction in the uninsured rate from 22.6 percent to 5.6 percent. The model predicts a moderate positive welfare gain from the ACA because of the redistribution of income through health insurance subsidies at the exchange as well as the Medicaid expansion. About 2.1 million more part-time jobs are created under the ACA at the expense of ...
Working Paper
The Effects of the Massachusetts Health Reform on Financial Distress
A major benefit of health insurance coverage is that it protects the insured from unexpected medical costs that may devastate their personal finances. In this paper, we use detailed credit report information on a large panel of individuals to examine the effect of a major health care reform in Massachusetts in 2006 on a broad set of financial outcomes. The Massachusetts model served as the basis for the Affordable Care Act and allows us to examine the effect of coverage on financial outcomes for the entire population of the uninsured, not just those with very low incomes. We exploit plausibly ...
Newsletter
The Affordable Care Act and the Labor Market
In 2010, Congress passed the Affordable Care Act (ACA), the largest expansion of health insurance since the advent of Medicaid and Medicare roughly a half century ago. Because the law is being phased in slowly and many provisions are still years away from being launched, the law?s impact on employment, wages, job mobility, retirement, self-employment, economic efficiency, and overall well-being remains contentious.
Newsletter
Medicaid Expansion and the Affordable Care Act: A Fiscal Checkup
On April 4, 2016, the Federal Reserve Bank of Chicago and the Civic Federation held a conference to examine how states are lowering the ranks of the uninsured under the Affordable Care Act (ACA)?by expanding Medicaid and through other strategies. The conference also looked at the ACA?s impact on delivering health care to traditionally underserved populations.
Briefing
How Well Insured Are Older Americans?
Using a combination of survey and administrative data, we calculate the portion of medical expenditures that retirees pay out of pocket. We find that retirees are mostly well insured against medical spending risk, with over 80 percent of their spending covered by Medicare, Medicaid or other insurers. We also find, however, that individuals with extremely high medical expenses pay a larger — not smaller — share out of pocket than those with more average expenses. Much of this difference is attributable to nursing home stays, which are typically uncovered by most insurers.
Newsletter
How Health Insurance Improves Financial Health
Low-income Americans who became eligible to enroll in Medicaid due to the Affordable Care Act saw their medical debt cut in half.
Working Paper
Shedding Light on Survey Accuracy—A Comparison between SHED and Census Bureau Survey Results
The annual Survey of Household Economics and Decisionmaking (SHED) receives substantial research attention for topics related to household finances and economic well-being. To assess the reliability of data from the SHED, we compare aggregate statistics from the SHED with prominent, nationally representative surveys that use different survey designs, sample methodologies, and interview modes. Specifically, we compare recent statistics from the SHED with similar questions in U.S. Census Bureau surveys, including the Current Population Survey (CPS) and the American Community Survey (ACS). ...