Did the affordable care act increase the availability of employer‐sponsored health insurance?

Abstract

The 2010 Affordable Care Act (ACA) included two provisions, the Employer Shared Responsibility Provision (the “employer mandate”) and the Small Business Health Options Program (“SHOP”), aimed at increasing the availability of employer‐sponsored health insurance (ESI) among workers at small firms. To examine whether these provisions led to greater ESI availability, I use 2011–2017 Medical Expenditure Panel Survey (MEPS) data in a difference‐in‐difference framework that compares changes in ESI availability among workers at small and large firms before and after the ACA's provisions come into effect. My estimates show that there is a 3.5 percentage point increase in ESI availability among workers at smaller firms after 2013. When focusing on workers most likely to be affected by the employer mandate, I find a larger 5.2 percentage point increase in ESI availability, amounting to a 39% decline in the proportion who do not have ESI available. However, I find no evidence that greater ESI availability led to increases in ESI coverage rates. Instead, descriptive estimates suggest that gains in health insurance coverage after 2013 consist of significant increases in the number of working adults who report having Medicaid coverage, including among workers who are offered ESI. I use MEPS data for my analysis because, along with employment, firm size, and health insurance details, MEPS also provides health status and healthcare access/utilization information. Looking at changes in these health measures, I find only limited evidence to suggest that the ACA's provisions improved access to care or measures of health status for workers.