The effects of health shocks on employment and health insurance: the role of employer-provided health insurance.

TitleThe effects of health shocks on employment and health insurance: the role of employer-provided health insurance.
Publication TypeJournal Article
Year of Publication2012
AuthorsBradley, CJ, Neumark, D, Motika, M
JournalInt J Health Care Finance Econ
Date Published2012 Dec
ISSN Number1573-6962
KeywordsAdult, Aged, Employment, Health Benefit Plans, Employee, Health Status, Hospitalization, Humans, Longitudinal Studies, Lung Diseases, Male, Neoplasms, Occupations, Retirement, Socioeconomic factors, Spouses

Employment-contingent health insurance (ECHI) has been criticized for tying insurance to continued employment. Our research sheds light on two central issues regarding employment-contingent health insurance: whether such insurance "locks" people who experience a health shock into remaining at work; and whether it puts people at risk for insurance loss upon the onset of illness, because health shocks pose challenges to continued employment. We study how men's dependence on their own employer for health insurance affects labor supply responses and health insurance coverage following a health shock. We use the Health and Retirement Study (HRS) surveys from 1996 through 2008 to observe employment and health insurance status at interviews 2 years apart, and whether a health shock occurred in the intervening period between the interviews. All employed married men with health insurance either through their own employer or their spouse's employer, interviewed in at least two consecutive HRS waves with non-missing data on employment, insurance, health, demographic, and other variables, and under age 64 at the second interview are included in the study sample. We then limited the sample to men who were initially healthy. Our analytical sample consisted of 1,582 men of whom 1,379 had ECHI at the first interview, while 203 were covered by their spouse's employer. Hospitalization affected 209 men with ECHI and 36 men with spouse insurance. A new disease diagnosis was reported by 103 men with ECHI and 22 men with other insurance. There were 171 men with ECHI and 25 men with spouse employer insurance who had a self-reported health decline. Labor supply response differences associated with ECHI-with men with health shocks and ECHI more likely to continue working-appear to be driven by specific types of health shocks associated with future higher health care costs but not with immediate increases in morbidity that limit continued employment. Men with ECHI who have a self-reported health decline are significantly more likely to lose health insurance than men with insurance through a spouse. With the passage of health care reform, the tendency of men with ECHI as opposed to other sources of insurance to remain employed following a health shock may be diminished, along with the likelihood of losing health insurance.

User Guide Notes

Endnote Keywords

health insurance/labor force participation/employment/Employment-contingent health insurance/health decline/health Shocks

Endnote ID


Alternate JournalInt J Health Care Finance Econ
Citation Key7756
PubMed ID22983813
PubMed Central IDPMC3518621
Grant ListR01 CA122145 / CA / NCI NIH HHS / United States
R01-CA122145 / CA / NCI NIH HHS / United States