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E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 3, No. 15: August 15, 2002
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
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Editor: PAMELA PERUN
Urban Institute
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Topic of This Issue:
Health Benefits
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T A B L E of C O N T E N T S
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NEW and FORTHCOMING ARTICLES
"Union Effects on Health Insurance Provision and Coverage in the
United States"
Industrial and Labor Relations Review, Vol. 55, No. 4, July
2002
THOMAS C. BUCHMUELLER
University of California at Irvine
JOHN DINARDO
University of Michigan
School of Public Policy
National Bureau of Economic Research (NBER)
ROBERT G. VALLETTA
Federal Reserve Bank of San Francisco
"The Role of Tax Subsidies in the Market for Health Insurance"
International Tax and Public Finance, Vol. 9, No. 1, pp.
33-50, January 2002
MARK STABILE
University of Toronto
Department of Economics
National Bureau of Economic Research (NBER)
"A Temporary Fix? Implications of the Move Away from
Comprehensive Health Benefits"
EBRI Issue Brief, No. 244, April 2002
LAURA TOLLEN
Kaiser Permanente Institute for Health Policy
ROBERT M. CRANE
Kaiser Permanente Institute for Health Policy
"Individual Insurance: How much Financial Protection does it
Provide?"
Health Affairs, April 17, 2002
JON GABEL
Health Research and Educational Trust
KELLEY DHONT
Health Research and Educational Trust
HEIDI WHITMORE
Health Research and Educational Trust
JEREMY PICKREIGN
Health Research and Educational Trust
"HIPPA on Privacy: Its Unintended and Intended Consequences"
Cato Journal, Vol. 23, Summer 2002
RICHARD A. EPSTEIN
University of Chicago Law School
"The Family Medical Leave Act: Reinstatement Following Leave: How
to Cope from an Employer's Perspective"
Houston Business and Tax Journal, Vol. 2, 2002
MARY JEAN GEROULO
University of Houston
Law Center
WORKING PAPERS
"The Interaction of Partial Public Insurance Programs and
Residual Private Insurance Markets: Evidence from the U.S.
Medicare Program"
AMY FINKELSTEIN
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
S S R N I N F O R M A T I O N
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scholarly discourse.
N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"Union Effects on Health Insurance Provision and Coverage in the
United States"
Industrial and Labor Relations Review, Vol. 55, No. 4, July
2002
BY: THOMAS C. BUCHMUELLER
University of California at Irvine
JOHN DINARDO
University of Michigan
School of Public Policy
National Bureau of Economic Research (NBER)
ROBERT G. VALLETTA
Federal Reserve Bank of San Francisco
Contact: ROBERT G. VALLETTA
Email: Mailto:rob.valletta@sf.frb.org
Postal: Federal Reserve Bank of San Francisco
101 Market Street
San Francisco, CA 94105 UNITED STATES
Phone: 415-974-3345
Fax: 415-977-4084
Co-Auth: THOMAS C. BUCHMUELLER
Email: Mailto:TCBUCHMU@UCI.EDU
Postal: University of California at Irvine
Irvine, CA 92697-3125 UNITED STATES
Co-Auth: JOHN DINARDO
Email: Mailto:JDINARDO@UMICH.EDU
Postal: University of Michigan
School of Public Policy
Room 418
440 Lorch Hall
Ann Arbor, MI 48109-1220
ABSTRACT:
During the past two decades, union density has declined in the
United States and employer provision of health benefits has
changed substantially in extent and form. Using individual
survey data spanning the years 1983-97 combined with employer
survey data for 1993, the authors update and extend previous
analyses of private-sector union effects on employer-provided
health benefits. They find that the union effect on health
insurance coverage rates has fallen somewhat but remains large,
due to an increase over time in the union effect on employee
"take-up" of offered insurance, and that declining unionization
explains 20-35% of the decline in employee health coverage. The
increasing union take-up effect is linked to union effects on
employees' direct costs for health insurance and the
availability of retiree coverage.
JEL Classification: J51, J32
______________________________
"The Role of Tax Subsidies in the Market for Health Insurance"
International Tax and Public Finance, Vol. 9, No. 1, pp.
33-50, January 2002
BY: MARK STABILE
University of Toronto
Department of Economics
National Bureau of Economic Research (NBER)
Contact: MARK STABILE
Email: Mailto:mark.stabile@utoronto.ca
Postal: University of Toronto
Department of Economics
150 St. George Street
Toronto, Ontario M5S 3G7 CANADA
Phone: 416-978-4329
Fax: 416-978-6713
ABSTRACT:
This paper investigates the role of tax subsidies in linking the
market for health insurance to the employment relationship.
Using both American and Canadian data, it investigates how these
subsidies influence whether health insurance coverage is offered
in different sized firms and whether it is offered through an
employer versus the individual private market. The findings
indicate that tax subsidies encourage the provision of insurance
in smaller firms. Removal of the subsidies would cause the level
of insurance in small firms to decline significantly, but would
not cause a large change in the level of insurance in larger
firms. Part of this decline would be offset by increases in the
market for individually purchased insurance.
Keywords: Tax subsidies, health insurance
______________________________
"A Temporary Fix? Implications of the Move Away from
Comprehensive Health Benefits"
EBRI Issue Brief, No. 244, April 2002
BY: LAURA TOLLEN
Kaiser Permanente Institute for Health Policy
ROBERT M. CRANE
Kaiser Permanente Institute for Health Policy
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=311381
Contact: LAURA TOLLEN
Email: Mailto:Laura.A.Tollen@kp.org
Postal: Kaiser Permanente Institute for Health Policy
Oakland, CA 94611 UNITED STATES
Phone: (510) 271-2366
Fax: (510) 267-2190
Co-Auth: ROBERT M. CRANE
Email: Mailto:Robert.M.Crane@kp.org
Postal: Kaiser Permanente Institute for Health Policy
Oakland, CA 94611 UNITED STATES
Paper Requests:
Contact Alicia Willis at Mailto:publications@ebri.org, or 2121 K
St., NW, Suite 600, Washington, DC 20037-1896.
Phone:(202)572-7422, Fax:(202)775-6312. Full-Text downloads are
available from SSRN Online for $7.50.
ABSTRACT:
This Issue Brief explores one of the potential consequences of
the return to double-digit health cost inflation: a movement
away from comprehensive health care coverage and the degradation
of the health insurance risk pools necessary to maintain such
coverage. There is growing concern in the health policy
community about attempts to "control" health care costs through
the temporary fix of demand-side mechanisms (i.e., enrollee
cost-sharing) and abandonment of supply-side, or provider-side,
mechanisms (i.e., traditional managed care tools). In
particular, there is concern about the impact of these changes
on the 125 million Americans with chronic illnesses for whom
comprehensive health insurance is essential.
Insurers and health plan purchasers tend to use three primary
means of reducing or moderating premiums: 1) implementing
enrollee cost-sharing; 2) excluding or limiting coverage for
certain types of procedures, conditions, and providers; and 3)
using selective provider networks and managed care approaches
pioneered by health maintenance organizations (HMOs). The Issue
Brief examines the first two approaches; the third does not seem
to be where most health plans are heading.
Keywords: Employment-based benefits, Health care costs, Health
care policy, Health care utilization, Health insurance coverage
JEL Classification: I11
______________________________
"Individual Insurance: How much Financial Protection does it
Provide?"
Health Affairs, April 17, 2002
BY: JON GABEL
Health Research and Educational Trust
KELLEY DHONT
Health Research and Educational Trust
HEIDI WHITMORE
Health Research and Educational Trust
JEREMY PICKREIGN
Health Research and Educational Trust
Contact: JON GABEL
Email: Mailto:Jgabel1@aha.org
Postal: Health Research and Educational Trust
325 Seventh Street, N.W.
Washington, DC 20004-2802 UNITED STATES
Phone: 202-626-2688
Fax: 202-626-2255
Co-Auth: KELLEY DHONT
Email: Mailto:kdhont@aha.org
Postal: Health Research and Educational Trust
325 Seventh Street, N.W.
Washington, DC 20004-2802 UNITED STATES
Co-Auth: HEIDI WHITMORE
Email: Mailto:hwhitml@aha.org
Postal: Health Research and Educational Trust
325 Seventh Street, N.W.
Washington, DC 20004-2802 UNITED STATES
Co-Auth: JEREMY PICKREIGN
Email: Mailto:jpickrel@aha.org
Postal: Health Research and Educational Trust
325 Seventh Street, N.W.
Washington, DC 20004-2802 UNITED STATES
ABSTRACT:
This paper examines the comparative financial protection
provided by individual and group health insurance. Data sources
include two national surveys of employer-based health plans and
e-health insurance listings for individual coverage on the World
Wide Web. Data on the use and cost of services are from the
National Medical Expenditure Survey (NMES), a national household
survey of Americans. We estimate that individual insurance pays
on average 63 percent of the health care bill, whereas group
health insurance pays 75 percent. Deductibles are much higher in
individual insurance, and covered benefits are more meager. At
200 percent of poverty, the top 25 percent of health care users
with individual coverage would spend 11 percent of their income
for out-of-pocket health care expenses, as opposed to 6 percent
for persons with group coverage.
Keywords: health insurance, uninsured
JEL Classification: I10, I11, I18
______________________________
"HIPPA on Privacy: Its Unintended and Intended Consequences"
Cato Journal, Vol. 23, Summer 2002
BY: RICHARD A. EPSTEIN
University of Chicago Law School
Paper ID: U Chicago Law & Economics, Olin Working Paper No. 144
Date: March 2002
Contact: RICHARD A. EPSTEIN
Email: Mailto:repstein@midway.uchicago.edu
Postal: University of Chicago Law School
1111 E. 60th St.
Chicago, IL 60637 UNITED STATES
Phone: 773-702-9563
Fax: 773-702-0730
Paper Requests:
Contact Marjorie Holme, Program Administrator and Discussion
Paper Coordinator, Olin Law and Economics Program, University of
Chicago Law School, 1111 E. 60th Street, Chicago, IL 60637.
Phone:(773)702-0220. Fax:(773)702-0730.
Mailto:mholme@uchicago.edu
ABSTRACT:
This paper critiques the elaborate system of privacy safeguards
that are found in the 1996 Health Insurance Portability and
Accountability Act (HIPAA). On the more specific level, it
explains how the detailed rules for the protection of privacy
interests are likely to impact the ability to organize new
medical research projects or to pursue follow-up with long-term
studies already in place. On the more general level, it
criticizes the requirement for individuated consent for discrete
medical or financial transactions as an impediment to freedom of
contract by precluding the use of generalized consent at the
formation of the health care provider/patient relationship. The
extreme set of ex ante regulatory provisions might make some
sense if the current systems in place for the protection of
medical privacy had shown some demonstrated failure that more
limited after-the-fact remedies could not correct in individual
cases. As no such showing has been made, the current explosion
in regulation is best understood as the aggrandizement of
regulatory power under the large grant of delegation contained
in the original statute.
Keywords: regulation, privacy, health, insurance, medical
research
______________________________
"The Family Medical Leave Act: Reinstatement Following Leave: How
to Cope from an Employer's Perspective"
Houston Business and Tax Journal, Vol. 2, 2002
BY: MARY JEAN GEROULO
University of Houston
Law Center
Contact: MARY JEAN GEROULO
Email: Mailto:mjgeroulo@msn.com
Postal: University of Houston
Law Center
100 Law Center
Houston, TX 77204-6060 UNITED STATES
ABSTRACT:
The 1993 Family Medical Leave Act was enacted to provide all
eligible Americans with up to twelve weeks of unpaid leave to
care for a new baby or to manage either their own or another
family member's serious medical condition. The Act also protects
employee jobs and guarantees employee will have a job to return
to when their leave is over. An employer may only discharge an
employee who is taking or has taken leave under the Act if the
employer can demonstrate that they would sustain a substantial
and grievous economic injury to their business by holding the
job open for the employee. However, despite the statutory
protection from termination, the number of lawsuits employees
are bringing against their employers for violation of this
provision indicate that employers are either ignoring the
provisions protecting employee jobs or do not understand the
procedural provisions that must be adhered to in order to comply
with the Act.
This paper reviews the provisions of the Act that govern how
and when an employer can discharge employees who take advantage
of Family Medical Leave. The author takes the position that many
of the lawsuits brought by employees against their employers for
unlawful discharge during or following an FMLA leave can be
avoided if employers (i) have a better understanding of all the
provisions and protections provided by the Act, (ii) implement
education programs for employees and managers explaining the
Act, (iii) implement and strictly adhere to policies and
procedures governing employee performance problems, progressive
counseling and termination, and (iv) identify and respond to
employee performance problems independently from the operational
problems created by employees who take advantage of FMLA leave.
The paper uses case analysis to demonstrate how employers either
intentionally or inadvertently violate provisions of the Act,
and offers suggestions to employers on how they can discharge
employees who take advantage of the Act without violating the
Act's provisions.
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"The Interaction of Partial Public Insurance Programs and
Residual Private Insurance Markets: Evidence from the U.S.
Medicare Program"
BY: AMY FINKELSTEIN
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=317616
Paper ID: NBER Working Paper No. W9031
Date: June 2002
Contact: AMY FINKELSTEIN
Email: Mailto:afink@mit.edu
Postal: National Bureau of Economic Research (NBER)
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-588-0361
Fax: 617-868-7242
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
A ubiquitous form of government intervention in insurance
markets is to provide compulsory, but partial, public insurance
coverage and to allow voluntary purchases of supplementary
insurance on the private market. Yet we know little about the
effects of such programs on total insurance coverage and on
welfare. A primary concern is that the compulsory public
insurance program - designed to counter the effects of adverse
selection in the private insurance market - may in fact
exacerbate adverse selection pressures in the residual private
insurance market. Theoretically, however, these programs may
either improve or impair the functioning of the residual private
insurance market. To examine this question empirically, I
investigate the effect of the U.S. Medicare program - which
provides partial public health insurance to individuals aged 65
and over - on the private insurance market for prescription
drugs, a benefit not provided by the public program. The results
suggest that Medicare does not have substantial spillover
effects on residual private insurance markets. In particular,
there is no evidence that Medicare is associated with increased
adverse selection problems in the residual private health
insurance market.