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SOCIAL SCIENCE RESEARCH NETWORK
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. 7, No. 37: December 15, 2006
Editors: PAMELA J. PERUN
Urban Institute
PAMELA@PLANETNOW.COM
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Topic of This Issue:
Healthcare
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T A B L E O F C O N T E N T S
"Employment and Adverse Selection in Health Insurance"
JAYANTA BHATTACHARYA
Stanford University - Center for Primary Care and
Outcomes Research, National Bureau of Economic Research
(NBER)
WILLIAM B. VOGT
Carnegie Mellon University - H. John Heinz III School of
Public Policy and Management, National Bureau of
Economic Research (NBER)
"The Health Effects of Medicare for the Near-Elderly Uninsured"
DANIEL POLSKY
University of Pennsylvania - School of Medicine
JALPA DOSHI
Affiliation Unknown
WILLARD G. MANNING
University of Chicago - Irving B. Harris Graduate School
of Public Policy Studies
"2006 Health Confidence Survey: Dissatisfaction with Health Care
System Doubles Since 1998"
RUTH HELMAN
Mathew Greenwald & Associates
PAUL FRONSTIN
Employee Benefit Research Institute (EBRI)
"Workers' Compensation: Benefits, Coverage, and Costs, 2004"
ISHITA SENGUPTA
National Academy of Social Insurance (NASI)
VIRGINIA P. RENO
National Academy of Social Insurance (NASI)
JOHN F. BURTON
Rutgers University - School of Management and Labor
Relations
"The Employer's Role in Reforming the U.S. Health Care System"
KENNETH L. SPERLING
CIGNA
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"Employment and Adverse Selection in Health Insurance"
NBER Working Paper No. W12430
Contact: JAYANTA BHATTACHARYA
Stanford University - Center for Primary Care and
Outcomes Research, National Bureau of Economic
Research (NBER)
Email: jay@stanford.edu
Auth-Page: http://ssrn.com/author=83173
Co-Author: WILLIAM B. VOGT
Carnegie Mellon University - H. John Heinz III
School of Public Policy and Management, National
Bureau of Economic Research (NBER)
Email: wilibear@andrew.cmu.edu
Auth-Page: http://ssrn.com/author=83175
Full Text: http://ssrn.com/abstract=923788
ABSTRACT: We construct and test a new model of employer-provided
health insurance provision in the presence of adverse selection
in the health insurance market. In our model, employers cannot
observe the health of their employees, but can decide whether to
offer insurance. Employees sort themselves among employers who do
and do not offer insurance on the basis of their current health
status and the probability distribution over future health status
changes. We show that there exists a pooling equilibrium in which
both sick and healthy employees are covered as long as the costs
of job switching are higher than the persistence of health
status. We test and verify some of the key implications of our
model using data from the Current Population Survey, linked to
information provided by the U.S. Department of Labor about the
job-specific human capital requirements of jobs.
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"The Health Effects of Medicare for the Near-Elderly Uninsured"
NBER Working Paper No. W12511
Contact: DANIEL POLSKY
University of Pennsylvania - School of Medicine
Email: polsky@mail.med.upenn.edu
Auth-Page: http://ssrn.com/author=157175
Co-Author: JALPA DOSHI
Affiliation Unknown
Auth-Page: http://ssrn.com/author=673820
Co-Author: WILLARD G. MANNING
University of Chicago - Irving B. Harris Graduate
School of Public Policy Studies
Email: w-manning@uchicago.edu
Auth-Page: http://ssrn.com/author=196468
Full Text: http://ssrn.com/abstract=930330
ABSTRACT: We study how the trajectory of health for the
near-elderly uninsured changes upon enrolling into Medicare at
the age of 65. We find that Medicare increases the probability of
the previously uninsured having excellent or very good health,
decreases their probability of being in good health, and has no
discernible effects at lower health levels. Surprisingly, we
found Medicare had a similar effect on health for the previously
insured. This suggests that Medicare helps the relatively healthy
65 year olds, but does little for those who are already in
declining health once they reach the age of 65. The improvement
in health between the uninsured and insured were not
statistically different from each other. The stability of
insurance coverage afforded by Medicare may be the source of the
health benefit suggesting that universal coverage at other ages
may have similar health effects.
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"2006 Health Confidence Survey: Dissatisfaction with Health Care
System Doubles Since 1998"
EBRI Notes, Vol. 27, No. 11, November 2006
Contact: RUTH HELMAN
Mathew Greenwald & Associates
Email: RUTHHELMAN@GREENWALDRESEARCH.COM
Auth-Page: http://ssrn.com/author=263460
Co-Author: PAUL FRONSTIN
Employee Benefit Research Institute (EBRI)
Email: FRONSTIN@EBRI.ORG
Auth-Page: http://ssrn.com/author=255140
Full Text: http://ssrn.com/abstract=942794
ABSTRACT: This paper presents the findings from the ninth annual
Health Confidence Survey (HCS), a survey that examines a broad
spectrum of health care issues, including Americans' satisfaction
with health care today, their confidence in the future of the
health care system and the Medicare program, and their attitudes
toward health care reform. The survey was conducted within the
United States between May 16 and June 3, 2006, through 23-minute
telephone interviews with 1,000 individuals ages 21 and older.
Random digit dialing was used to obtain a representative cross
section of the U.S. population. Interview quotas were established
by sex of respondent and employment status, and the data were
weighted by gender, age, education, and employment to reflect the
actual proportions in the population. The HCS is co-sponsored by
the Employee Benefit Research Institute (EBRI) and Mathew
Greenwald & Associates, Inc., a Washington, DC-based market
research firm. The 2006 HCS data collection was funded by grants
from 10 private organizations.
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"Workers' Compensation: Benefits, Coverage, and Costs, 2004"
National Academy of Social Insurance, Forthcoming
Contact: ISHITA SENGUPTA
National Academy of Social Insurance (NASI)
Email: isengupta@nasi.org
Auth-Page: http://ssrn.com/author=507246
Co-Author: VIRGINIA P. RENO
National Academy of Social Insurance (NASI)
Email: vreno@nasi.org
Auth-Page: http://ssrn.com/author=377090
Co-Author: JOHN F. BURTON
Rutgers University - School of Management and Labor
Relations
Email: jfburton@rci.rutgers.edu
Auth-Page: http://ssrn.com/author=20155
Full Text: http://ssrn.com/abstract=943779
ABSTRACT: The purpose of this report is to provide a benchmark of
the benefits and costs of workers' compensation to facilitate
policy-making and comparisons with other social insurance and
employee benefit programs. Workers' compensation pays for medical
care, rehabilitation and cash benefits for workers who are
injured on the job or who contract work-related illnesses. It
also pays benefits to families of workers who die of work-related
causes. Each state has its own workers' compensation program.
This report was released in July 2006 and reports data from 2004,
the most recently available. The report is the ninth of its kind
issued by the National Academy of Social Insurance.
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"The Employer's Role in Reforming the U.S. Health Care System"
Journal of Applied Corporate Finance, Vol. 18, No. 1, pp.
108-116, Winter 2006
Contact: KENNETH L. SPERLING
CIGNA
Auth-Page: http://ssrn.com/author=656978
Full Text: http://ssrn.com/abstract=921686
ABSTRACT: In 2005 large U.S. employers spent an average of almost
$7,400 per head on health care benefits, a 73% increase in the
last five years. If the current trend continues, American
companies may find it difficult to compete in a global
marketplace where international competitors provide labor with
heath care at a fraction of U.S. costs.
This article argues that effective reform of the U.S. health care
system will require major efforts from all major stakeholders,
starting with the federal government and state and local
governments and including insurance companies and the consumers
of health care services. By far the important role, however, is
reserved for private-sector employers, which have been the
incubator for recent innovations in American health care and are
in the best position to coordinate and drive health care reform.
But incremental steps in cost-sharing, small-scale pilot projects
of consumer-based designs, and employee awareness campaigns will
not be enough. Employers need to take radical steps to break
through the inertia that has built up among all stakeholders over
the past 50 years. Chief among the author's proposals for
employers are the following:
- In choosing a health care plan for employees, use value-based
purchasing criteria that consider more than just the price and
access to services.
- Help consumers by demanding information from providers and
insurers about the cost and efficacy of health care services, and
of alternative treatments, before the choices are made.
- Encourage consumerism by setting up benefit plans that have a
Health Reimbursement Arrangement (HRA) or a Health Savings
Account (HSA) component.
As the author states in closing, Let these reforms begin with
employers as the organizing force to drive needed change across
the system. That may very well be the only way to save our
employment-based model.
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