Health Insurance Health Reform

The Changing US Health Insurance Market

An interesting paper by Graves and Nikpay (2017) look at the evoluation of the health insurance market before and after Obamacare.  The authors find

We found that the ACA’s unprecedented coverage changes increased transitions to Medicaid and nongroup coverage among the uninsured, while strengthening the existing employer-sponsored insurance system and improving retention of public coverage. However, our results suggest possible weakness of state Marketplaces, since people gaining nongroup coverage were disproportionately older than other potential enrollees.

The authors reach this conclusion using the 2011-2014 Medical Expenditure Panel Survey (MEPS) for individuals aged 18-63 years.

One interesting finding is that they observe little crowd-out overall.  A large share of the take-up of ACA plans was from the uninsured rather than individuals in employer-sponsored plans switching to the individual market.   Further, few people who had private insurance dropped this coverage for Medicaid after the Medicaid expansion. However, not everything comes up roses with respect to the exchanges.

Our results also highlight an enormous missed opportunity. We found that young adults were disproportionately more likely to transition from employer-sponsored insurance to uninsured status.Yet despite the availability of subsidized Marketplace coverage in 2014, the rates at which adults at all ages with employer coverage became uninsured did not change between 2012 and 2014.

The authors note that when individuals–particularly young adults–lose private health insurance due to employment termintation, it may be useful to highlight the benefits of the less costly (to the worker due to subsidies) insurance plans in the health insurance exchanges, as COBRA plans are typically very expensive for individuals.

Overall, the study does very nice job of showing how insurance transition states evolved before and after the implementation of the Affordable Care Act.  These statistics, however, may or may not be relevant depending on whether and how “repeal and replace” moves forward.



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