Employer-sponsored health insurance premiums and income in U.S. tax data

Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers

“…In contrast, however, we find close to zero effects for those at the bottom of the income distribution (those previously earning below $20,000). These results are consistent with Lurie and Miller (2023) who find that lower-wage workers tend to not receive employer-sponsored health insurance benefits. Because they do not receive ESI, rising health insurance premiums will not make these workers more expensive to retain.…”

“…First, the "head tax" pushes unemployment effects to be relatively regressive. However, as Lurie and Miller (2023) also find, there is a positive correlation between wages and health insurance generosity. As we highlight in Section 3, rising health care prices generate larger increases in premiums for workers who are, ex ante, receiving more generous health insurance benefits.…”

“…However, we also find close to zero effects for workers at the very bottom of the income distribution (i.e., those previously earning less than $20,000 per year). This aligns with the fact that these low-wage workers rarely receive health insurance from their employers and therefore do not become more expensive to employ when health care prices increase (Lurie and Miller, 2023). In general, the fact that availability and generosity of health insurance is positively correlated with wages pushes the unemployment effects of rising health care prices to be relatively more progressive than they would be in a world where health insurance premiums were uniform across workers.…”

“…ESI coverage is notably higher among higher-income individuals. While 10% of individuals in the 0 through 25 th percentiles of income have ESI coverage, 84% of individuals in the 95 th through 99 th percentiles have ESI coverage (Lurie and Miller, 2023). Likewise, conditional on being insured through ESI, higher-income individuals select markedly more expensive policies (Lurie and Miller, 2023).…”