Three essays on cost, value, and consequences of health insurance

In these three essays, I explore interactions between health insurance and other financial outcomes. Chapter 1 develops as model of cash wages and worker value of employer-sponsored health insurance (ESI), expanding standard economic models of compensating differentials by predicting that offsets in cash wages will differ among individuals. I examine new Medicare-eligibility of a worker's spouse--which lowers the value of ESI by improving the worker's non-employment insurance option--as a sudden change in worker value. Using a regression discontinuity approach in a sample of near elderly, full-time workers, I find that spousal Medicare eligibility leads to a raise of at least 6% if the spouse's only source of private insurance is through the worker's employer. Chapter 2 examines the financial consequences of illness for uninsured Americans using the Health and Retirement Study. We use triple difference median regressions on a sample of newly-ill/uninsured near elderly households matched to newly-ill/insured households to measure changes in non-housing assets. We also include a matched control group of households whose members are not ill. Controlling for the effects of insurance status and illness, we find that the median household with a newly-ill, uninsured individual suffers a statistically significant decline in household assets of between 30 and 50% relative to households with matched insured individuals. Newly-ill, insured individuals do not experience a decline in wealth. Chapter 3 shows predicted future availability of ESI affects the value of non-group health insurance and is a significant factor in the initial non-group purchase decision. I find individuals with a low probability of future ESI are more likely to purchase non-group insurance than similar individuals with a high probability of future ESI. Additionally, I interact state non-group insurance regulations with predicted future ESI and find that community rating in the non-group market increases the likelihood that workers with a low predicted probability of future ESI will purchase non-group insurance compared to workers with a higher predicted probability of future ESI.

Value

24060