Declines in Employer Sponsored Coverage between 2000 and 2008: Offers, Take-Up, Premium Contributions, and Dependent Options

Abstract

The research program of the Center for Economic Studies (CES) produces a wide range of economic analyses to improve the statistical programs of the U.S. Census Bureau. Many of these analyses take the form of CES research papers. The papers have not undergone the review accorded Census Bureau publications and no endorsement should be inferred. Any opinions and conclusions expressed herein are those of the author(s) and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. Republication in whole or part must be cleared with the authors. To obtain information about the series, see www.ces.census.gov or contact Cheryl Grim, Editor,

The Impact of the Macroeconomy on Health Insurance Coverage: Evidence from the Great Recession

“…All models control for both individual‐specific and year‐specific fixed effects; our identification of the effect of the state unemployment rate on the probability of health insurance coverage comes from variation within people over time in deviations of the state unemployment rate from the national mean for that year. The research design requires that we control for year‐fixed effects because even before the recession, health care costs were rising (Chernew et al ., ), employer offers of health insurance were declining (Vistnes et al ., ), and the percentage of Americans covered by employer‐sponsored insurance was falling (Fronstin, ). Because our data contain multiple observations of the same person over time, we are also able to control for individual fixed effects so that our estimates are not influenced by any time invariant unobserved characteristics that affect health insurance status.…”

“…Although there are annual national estimates of the percent and number of Americans who are uninsured (e.g., Fronstin, ; DeNavas‐Walt et al ., ), there has been no analysis of how health insurance coverage was impacted by increases in the unemployment rate around the time of the Great Recession. Trends in annual data may reflect the continuing long‐term decline in the generosity of health insurance (Vistnes et al ., ). This paper identifies the impact of worsening macroeconomic conditions (measured by the state monthly unemployment rate) by using longitudinal data that allow us to investigate the heterogeneity of impact by demographic characteristics.…”

“…The relationship between unemployment rates and the probability of insurance coverage is likely to change over time in response to changes in health insurance markets and public health insurance programs; as a result, estimates from earlier papers may be out of date. For example, there have been declining trends (since the peaks reached in 2000) in both employer offers of health insurance (Vistnes et al ., ) and employees covered through employer‐sponsored insurance (Fronstin, ); these secular changes may have altered the relationship between the unemployment rate and health insurance. Moreover, each recession has distinct characteristics that may imply a different relationship between the unemployment rate and coverage.…”

The Impact of the Macroeconomy on Health Insurance Coverage: Evidence from the Great Recession

“…All models control for both individual-specific and year-specific fixed effects; our identification of the effect of the state unemployment rate on the probability of health insurance coverage comes from variation within people over time in deviations of the state unemployment rate from the national mean for that year. The research design requires that we control for year-fixed effects because even before the recession, health care costs were rising (Chernew et al, 2009), employer offers of health insurance were declining (Vistnes et al, 2012), and the percentage of Americans covered by employersponsored insurance was falling (Fronstin, 2011). Because our data contain multiple observations of the same person over time, we are also able to control for individual fixed effects so that our estimates are not influenced by any time invariant unobserved characteristics that affect health insurance status.…”

Trends in Health Care Financial Burdens, 2001 to 2009

“…The last decade included two recessions, one early in the decade and one in the latter part of the decade. At the same time, during the decade, premiums for employer‐sponsored insurance outstripped income growth, and there were pronounced changes in employer‐offer and employee take‐up behavior . While premium trends must be considered in conjunction with trends in out‐of‐pocket spending, we found that it was premium growth that exceeded income growth over this decade, leading to higher financial burdens.…”