Effects of Federal Policy to Insure Young Adults:  Evidence from the 2010 ACA’s Dependent              Coverage Mandate    ...
Motivation             2/41
There is something different about youngThere is something different about young adults..                                  ...
Snapshot of Uninsurance in the US (2008)                                           4/41
Reasons for Lack of Health InsuranceAging out of parental or government policies (Anderson,Dobkin and Gross, 2012)Lack of ...
Implications of High Uninsured RateUninsured young adults are 3x more likely to delay or forgomedical care (Nicolson et. a...
State Government Intervention1995: Utah first state to extend dependent coverage2003-2009, most states passed some measure3...
Effect of State LawsMixed evidence on the impact of state laws  1   Monheit et al (2011)           Small increases in depen...
Federal ExpansionACA enacted March 2010; dependent coverage provisioneffective first renewal date after September 23rd 2010 ...
Early Evidence of ACA Dependent                                  CoverageSommers and Kronick(2011)    Use CPS data from 20...
Research Question and ContributionsEvaluate the effect of the federal expansion on  1   Take-up and substitution of coverag...
MechanismsFederal law will have anticipatory impactThe effects will be concentrated among families with lowermarginal cost ...
Preview of Results1   Decreased uninsurance among young adults (9.3 % ; 3.3 ppt)2   Increased dependent ESI coverage (26.6...
DataWe use the 2008 panel of the SIPP which started inSeptember 2008About 50,000 households interviewed every 4 monthsCont...
Variables of Interest1   Insurance Coverage        Any source of insurance        As a dependent on parent’s ESI policy   ...
IdentificationDifference-in-difference (DID) methodology“Treatment” group –Young adults aged 19-25“Control” group –Those aged...
Percentage of Young Adults with Any Insurance by Treatment and Control                             Groups                 ...
Trends Test- Data from August                         2008-February 2010                                        Any      D...
Econometric Specification   Yigst   = α + γ1 Treatg + γ2 Enactt + γ3 Implementt                 +γ4 (Treatg × Enactt ) + γ5...
Summary Statistics                          All Obs.   Age 16-18   Age 19-25   Age 27-29Health Insurance StatusAny Source ...
Percentage of Young Adults Covered by           ESI as Parent’s Dependents                                        21/41
Effect of ACA Dependent Coverage                     Any      Dependent   Own Coverage     Own ESI     Public              ...
Overview and Implications of ResultsEvidence of anticipatory response to the enactment of the lawAbout 9.5% drop in rate o...
Effect of Mandate using Sample with                             “Excellent” Health                    Any      Dependent   ...
Effect of Mandate using Sample without                            “Excellent” Health                    Any      Dependent ...
Effect of Mandate using Sample with                             Parental Information                         Any      Depen...
States With Dependent Coverage Laws                   Any      Dependent   Own Coverage   Own ESI     Public              ...
States without Dependent Coverage Laws                    Any      Dependent   Own Coverage   Own ESI      Public         ...
Three implementation Periods                      Any      Dependent   Own Coverage   Own ESI     Public                  ...
Marginal Cost Analysis: Family vs.                        Non-family CoverageDescriptive Results                          ...
Interaction of Young Adult Mandate with              other features of ACAdefinition of                      “affordability”...
32/41
The Effect of the ACA DependentProvision on Parent’s Own ESI Coverage                            Parent has ESI     Enactme...
Effect of Mandate on Labor Market                                        Outcomes                   Employed   Full time   ...
Overview of Mandate on Labor Market1   No evidence of an impact on labor force participation2   Young adults are less like...
Robustness of Results1   Using only young or older control group2   Using sample without Massachusetts3   Clustering at an...
DD Results using Aggregated Quarterly       Data & Wild Cluster Bootstrap-t Method                         Any      Depend...
LimitationsEarly evidence–one year after implementationLong run effect might be differentACA 2014 could change the take-up  ...
Why Are Young Adults Not Signed Up for                         Parental ESI?Among those with parents with ESI, post August...
Conclusion and Next StepsIncrease in coverage not as large because increase independent coverage through parent offset by d...
Thank You            41/41
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LDI Research Seminar 9_7_12 Eff ects of Federal Policy to Insure Young Adults: Evidence from the 2010 ACA's Dependent Coverage Mandate

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Transcript of "LDI Research Seminar 9_7_12 Eff ects of Federal Policy to Insure Young Adults: Evidence from the 2010 ACA's Dependent Coverage Mandate"

  1. 1. Effects of Federal Policy to Insure Young Adults: Evidence from the 2010 ACA’s Dependent Coverage Mandate Yaa Akosa Antwi IUPUI Department of Economics Asako Moriya IU School of Public and Environmental Affairs(SPEA) Kosali Simon IU School of Public and Environmental Affairs(SPEA) NBER September 7, 2012 1/41
  2. 2. Motivation 2/41
  3. 3. There is something different about youngThere is something different about young adults.. adults.. US Facebook Users, by Age, 2010 55‐65 7% Age in Years 45‐54 13% 35‐44 18% 26‐34 23% 18‐25 29% 13‐17 10% 0% 5% 10% 15% 20% 25% 30% 35%Source: gold.insidenetwork.com/facebook 2 3/41
  4. 4. Snapshot of Uninsurance in the US (2008) 4/41
  5. 5. Reasons for Lack of Health InsuranceAging out of parental or government policies (Anderson,Dobkin and Gross, 2012)Lack of human capital necessary for jobs that provide healthinsurance(Levy, 2007)Adverse selection (Monhiet et al 2011, Levine et. al 2011)Actuarially unfair policies 5/41
  6. 6. Implications of High Uninsured RateUninsured young adults are 3x more likely to delay or forgomedical care (Nicolson et. al., 2009, Callahan and Cooper2005)Significantly less likely to have a usual source of care or fillprescriptions (Nicolson et. al., 2009, Callahan and Cooper2005)2x more likely to have medical debt or trouble paying medicalbill (Nicholson et. al 2009)More likely overuse expensive emergency room care (Andersonet al 2012) 6/41
  7. 7. State Government Intervention1995: Utah first state to extend dependent coverage2003-2009, most states passed some measure31 states had passed a law before the federal lawSeveral restrictions 1 Self insured are exempt 2 IRS rules not revised for tax deduction rules 3 May have allowed separate premiums 4 Age, student, marital status, residency restrictions 7/41
  8. 8. Effect of State LawsMixed evidence on the impact of state laws 1 Monheit et al (2011) Small increases in dependent coverage 1.52 pp for all young adults 3.84 pp for those ages 1925 residing with parents Increases were largely offset by declines in own name ESI No significant impact on young adult uninsured rates 2 Levine et. al (2011) 3 pp reduction in rates of uninsurance among those eligible. This translates to an 11% reduction of uninsurance among targeted young adults. 8/41
  9. 9. Federal ExpansionACA enacted March 2010; dependent coverage provisioneffective first renewal date after September 23rd 2010 Requires insurers to offer coverage to older dependent children on same terms as for younger dependent children Many insurers acted sooner than required date Generally positively received provision in ACAClosely watched as politically meaningful provision Applies to critical voting populationOther major insurance provisions of ACA, 2014 9/41
  10. 10. Early Evidence of ACA Dependent CoverageSommers and Kronick(2011) Use CPS data from 2005-2010 Compare 19-25 year-olds with 26-34 year-olds Control for age-group and survey year Find 2.9 ppt increase in insurance coverage 4.3 ppt increase in dependent coverage through parents 2.5 ppt drop in own policy No change in public insuranceCantor et. al (2012) Use CPS data from 2004 to 2010 DD methodology with detailed controls for confounding factor 3.5 ppt drop in uninsurance (10% drop) 716,000 young adults gained insuranceNHIS estimates Compare health insurance trends for 19-25 and 26-35 year olds Estimates from September 2010 to June 2011 Insurance coverage increased from 64% to 73% (2.1 million ) 10/41
  11. 11. Research Question and ContributionsEvaluate the effect of the federal expansion on 1 Take-up and substitution of coverage (private to private or public to private) Use longitudinal data (SIPP) Contains point-in-time questions about insurance rather than one year reference as in CPS Allows evaluation of enactment and implementation effects 2 Labor Market Behavior First paper to evaluate this 11/41
  12. 12. MechanismsFederal law will have anticipatory impactThe effects will be concentrated among families with lowermarginal cost of adding dependentsDemand will be greatest among those in worse healthParents may add health insurance– unlikely.Parents may switch from single to family coverage– likely toadd dependents when already covering dependentsEffects should be smaller among full time students becausemany already eligibleWe expect to see different effects in states with and withoutprior laws expanding coverage to young adults. 12/41
  13. 13. Preview of Results1 Decreased uninsurance among young adults (9.3 % ; 3.3 ppt)2 Increased dependent ESI coverage (26.6% ; 6.2 ppt)3 Substitution away from existing sources4 Take-up concentrated in families with low marginal cost of additional dependents5 Smaller effect for students compared to non-students6 Similar effect for states with and without prior laws7 Evidence of labor market flexibility for young adults (reduced job-lock) 13/41
  14. 14. DataWe use the 2008 panel of the SIPP which started inSeptember 2008About 50,000 households interviewed every 4 monthsContains detailed demographic information on healthinsurance and labor marketCurrent information is from August 2008- November 2011Base sample composed of 16-29 year olds (minus 26 year olds) 14/41
  15. 15. Variables of Interest1 Insurance Coverage Any source of insurance As a dependent on parent’s ESI policy Non-group insurance in own name Own ESI Public insurance2 Labor Market Employed Employed full time Number and Log hours Probability of having hours that vary 15/41
  16. 16. IdentificationDifference-in-difference (DID) methodology“Treatment” group –Young adults aged 19-25“Control” group –Those aged 15-18 and 27-29Identifying assumption is that (conditional on observablecharacteristics) the trend between treatment and controlvariables would have been constant over time 16/41
  17. 17. Percentage of Young Adults with Any Insurance by Treatment and Control Groups 17/41
  18. 18. Trends Test- Data from August 2008-February 2010 Any Dependent source coverageInteraction of Time Trend and 0.001 0.001a Dummy Variable for Treatment Group (0.001) (0.001) 18/41
  19. 19. Econometric Specification Yigst = α + γ1 Treatg + γ2 Enactt + γ3 Implementt +γ4 (Treatg × Enactt ) + γ5 (Treatg × Implementt ) + Xigst β + τt + ξs + igsti = individualg =age ranges = statet =time 19/41
  20. 20. Summary Statistics All Obs. Age 16-18 Age 19-25 Age 27-29Health Insurance StatusAny Source 0.727 0.870 0.678 0.693Dependent Coverage 0.267 0.523 0.264 0.019Own ESI 0.198 0.024 0.189 0.393Own Coverage(NG) 0.028 0.256 0.127 0.129Public 0.158 0.256 0.127 0.129Employment StatusEmployed 0.569 0.253 0.628 0.754Unemployed 0.080 0.063 0.089 0.076DemograhicsAge 22.22 17.02 21.96 28.01White 0.602 0.575 0.613 0.604Black 0.136 0.146 0.135 0.127Hispanic 0.190 0.200 0.183 0.195Married 0.180 0.013 0.140 0.435EducationStudent 0.419 0.885 0.361 0.084Less than HS 0.257 0.770 0.098 0.103HS 0.172 0.178 0.325 0.245Some College 0.333 0.051 0.452 0.347College 0.113 0 0.113 0.223 20/41
  21. 21. Percentage of Young Adults Covered by ESI as Parent’s Dependents 21/41
  22. 22. Effect of ACA Dependent Coverage Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment -0.002 0.024*** 0.002 -0.017*** -0.011*Effect (0.006) (0.006) (0.003) (0.005) (0.005)Implementation 0.032*** 0.070*** -0.008*** -0.031*** -0.002Effect (0.007) (0.007) (0.002) (0.006) (0.006)Dep Var. MeansTreament Before 0.665 0.234 0.035 0.204 0.123Control Before 0.781 0.280 0.023 0.208 0.0182Note: Enactment phase: Mar-Sep, 2010; Implementation phase: Oct 2010-Nov 2011. 22/41
  23. 23. Overview and Implications of ResultsEvidence of anticipatory response to the enactment of the lawAbout 9.5% drop in rate of uninsurance among young adultsWith base of 29.5 million young adults, roughly 938,000gained insuranceRepresents about a 51% take-upIf all gains in dependent coverage reduced uninsurance then2.1 million would have gained insuranceAbout 236,000 switching from non-group insuranceAbout 920,000 drop own ESI 23/41
  24. 24. Effect of Mandate using Sample with “Excellent” Health Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment -0.002 0.029*** 0.006 -0.028*** -0.011Effect (0.011) (0.008) (0.006) (0.009) (0.010)Implementation 0.027*** 0.078*** -0.010* -0.046*** -0.005Effect (0.010) (0.009) (0.005) (0.008) (0.008)Dep Var. MeansTreament Before 0.742 0.313 0.044 0.215 0.088Control Before 0.847 0.386 0.023 0.0190 0.146 24/41
  25. 25. Effect of Mandate using Sample without “Excellent” Health Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment -0.004 0.019** -0.002 -0.009 -0.011Effect (0.009) (0.010) (0.004) (0.008) (0.009)Implementation 0.035*** 0.067*** -0.006 -0.024** 0.001Effect (0.013) (0.010) (0.004) (0.010) (0.009)Dep Var. MeansTreament Before 0.633 0.199 0.030 0.198 0.142Control Before 0.749 0.216 0.023 0.223 0.206 25/41
  26. 26. Effect of Mandate using Sample with Parental Information Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment 0.039*** 0.014 0.005 -0.012 0.032*Effect (0.014) (0.009) (0.007) (0.011) (0.018)Implementation 0.067*** 0.096*** -0.013* -0.024 0.013Effect (0.024) (0.010) (0.007) (0.015) (0.022)Dep Var. MeansWith Parental ESITreament Before 0.435 0 0.031 0.104 0.215Control Before 0.658 0 0.017 0.064 0.479Without Parental ESITreament Before 0.793 0.525 0.032 0.154 0.054Control Before 0.912 0.715 0.015 0.075 0.081 26/41
  27. 27. States With Dependent Coverage Laws Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment -0.003 0.023*** 0.005 -0.021*** -0.013*Effect (0.007) (0.007) (0.004) (0.007) (0.007)Implementation 0.029** 0.069*** -0.006** -0.031*** -0.007Effect (0.011) (0.009) (0.003) (0.007) (0.007)Dep Var. MeansTreament Before 0.684 0.250 0.032 0.211 0.120Control Before 0.790 0.291 0.023 0.215 0.169 27/41
  28. 28. States without Dependent Coverage Laws Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment -0.003 0.028*** 0.002 -0.011 -0.014**Effect (0.011) (0.009) (0.006) (0.007) (0.007)Implementation 0.034*** 0.074*** -0.009** -0.032*** 0.002Effect (0.008) (0.010) (0.004) (0.010) (0.011)Dep Var. MeansTreament Before 0.633 0.207 0.040 0.193 0.128Control Before 0.766 0.262 0.023 0.195 0.204 28/41
  29. 29. Three implementation Periods Any Dependent Own Coverage Own ESI Public Source Coverage NongroupMar-Sept 2010 -0.002 0.024*** 0.002 -0.017*** -0.010* (0.007) (0.005) (0.003) (0.005) (0.005)Oct 2010-Feb 2011 0.025** 0.049*** -0.004 -0.022*** 0.001 (0.010) (0.007) (0.003) (0.007) (0.007)Mar-Sept 2011 0.032*** 0.072*** -0.009*** -0.028*** -0.009 (0.009) (0.008) (0.003) (0.007) (0.006)Oct-Nov 2011 0.026** 0.102*** -0.011** -0.057*** -0.008 (0.011) (0.014) (0.005) (0.013) (0.013)Dep Var. MeansTreament Before 0.665 0.234 0.035 0.204 0.123Control Before 0.781 0.280 0.023 0.208 0.0182 29/41
  30. 30. Marginal Cost Analysis: Family vs. Non-family CoverageDescriptive Results % of young adults with dependent coverage through N parents after the mandate Family coverage 29.1 % 1,144 Non-family coverage 20.9 % 2,550Regression Results Dependent coverage Indicator for parents having 0.096*** family coverage before ACA (0.025) 30/41
  31. 31. Interaction of Young Adult Mandate with other features of ACAdefinition of “affordability” will matterNext slide is from:Burkhauser, Lyons and Simon, 2011 Meaning and Measurement ofAffordable in the Affordable Care Act , NBER WP No. 17279. 31/41
  32. 32. 32/41
  33. 33. The Effect of the ACA DependentProvision on Parent’s Own ESI Coverage Parent has ESI Enactment Effect 0.012 (Mar-Sep, 2010) (0.008) Implementation Effect 0.007 (Oct, 2010-) (0.008) Dep Var. Means Treament Before 0.689 Control Before 0.666 33/41
  34. 34. Effect of Mandate on Labor Market Outcomes Employed Full time # of hours Log hours Hours varyEnactment -0.002 -0.017*** -0.800*** -0.027 0.014***Effect (0.006) (0.006) (0.209) (0.021) (0.005)Implementation -0.006 -0.016** -0.861*** -0.048** 0.012**Effect (0.006) (0.006) (0.319) (0.021) (0.006)Dep Var. MeansTreament Before 0.651 0.462 23.3 2.27 0.099Control Before 0.524 0.353 17.8 1.73 0.080Treatment After 0.602 0.423 20.4 2.04 0.099Control After 0.481 0.335 16.0 1.56 0.066 34/41
  35. 35. Overview of Mandate on Labor Market1 No evidence of an impact on labor force participation2 Young adults are less likely to have full time job3 Evidence that mandate reduced the number of hours young adults work4 Overall evidence of labor market flexibility (reduced job lock) 35/41
  36. 36. Robustness of Results1 Using only young or older control group2 Using sample without Massachusetts3 Clustering at an aggregate level as in Cameron et.al 20084 Logistic regression5 Using one post dummy 36/41
  37. 37. DD Results using Aggregated Quarterly Data & Wild Cluster Bootstrap-t Method Any Dependent Own Coverage Own ESI Public Source Coverage NongroupEnactment Effect 0.007 0.039** 0.001 -0.019** -0.014p-value 0.118 0.040 0.432 0.022 0.126Implementation Effect 0.037*** 0.092*** -0.009** -0.036*** -0.007p-value 0.001 0.001 0.017 0.003 0.243 37/41
  38. 38. LimitationsEarly evidence–one year after implementationLong run effect might be differentACA 2014 could change the take-up Among young adults who have parental ESI, 16% have income under 133% FPL, and 37% have income 133-400% of FPL. 38/41
  39. 39. Why Are Young Adults Not Signed Up for Parental ESI?Among those with parents with ESI, post August 2011 36% ESI in own name 14% public 8% individual market (own or dependent) 5% other private insurance 35% are uninsuredComparing uninsured to those with parental ESI: older by 0.8 years more likely to be male more likely to be African American or Hispanic more likely to be unemployed less likely to be students less educated more likely to report ”less than excellent health report less household income→ less likely to be insured in general, to have generousparental ESI, to have close family ties? 39/41
  40. 40. Conclusion and Next StepsIncrease in coverage not as large because increase independent coverage through parent offset by drop in ownsources of coverageEfficiency implications Who will pay? Is this efficient? Will this lead to further increases in premiums for family coverage?Future work should explore effect of expansion onout-of-pocket medical expenses, and healthcare utilization,and interaction with state laws.Effects outside health economics: impact on transition toadulthood, intergenerational relationships 40/41
  41. 41. Thank You 41/41

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