state coverage initiatives workshop for state officials august 3-4, 2006 conrad hilton hotel

State Coverage Initiatives Workshop for State Officials 13 August 2006

Session 3: Coverage MandatesPanelist: Jerry Russo

Department of Economics University of Hawaii

[email protected]

State Coverage Initiatives Workshop for State OfficialsAugust 3-4, 2006Conrad Hilton HotelChicago, IllinoisSponsored by the Robert Wood Johnson Foundation’s State Coverage Initiatives ProgramConducted by Academy Health

mailto:[email protected]

2

This research is funded in part through a U.S. Health Resources and Services Administration, State Planning Grant to the Hawaii State Department of Health. Sub-Contract Research Corporation of the University of Hawaii. Research conducted by the University of Hawaii, Social Science Research Institute in collaboration with the Hawaii State Department of Health, Hawaii Institute for Public Affairs: Hawaii Uninsured Project and the Hawaii Health Information Corporation.

Labor Market Impacts of Hawaii’s Employer Mandate

Gerard RussoDepartment of Economics

University of [email protected]

mailto:[email protected]


University of Hawaii Research TeamHawaii State DOH HRSA SPG

Gerard Russo, Ph.D. Sang-Hyop Lee, Ph.D. Lawrence Nitz, Ph.D. Katerina Sherstyuk, Ph.D. Thamana Lekprichakul, Ph.D. Rui Wang, Ph.D. Candidate Jaclyn Lindo, Ph.D. Student University of Hawai`i at Mānoa http://www.soc.hawaii.edu/HI_coverage/

http://www.soc.hawaii.edu/HI_coverage/


Institutional Partners & Collaborators Health Resources & Services Administration, State

Planning Grant Program Hawaii State Department of Health Hawaii Institute for Public Affairs, Hawaii Uninsured

Project Hawaii Health Information Corporation Robert Wood Johnson Foundation, AcademyHealth,

State Coverage Initiative University of Minnesota, State Health Access Data

Assistance Center University of Hawaii, Social Science Research Institute


Prepaid Health Care Act of 1974 (Mandatory ESI): Main Features Private-Sector Employees: 20+ Hour Rule Employee Contribution to Premiums Limited to 1.5% of

Wages Family Coverage is Optional Exempt workers:

Part-time workers working less than 20 hours per week Low-earning workers earn less than 86.67 times minimum

wage per month (2006: $6.75 x 86.67=$585; 2007: $7.25 x 86.67=$628.)

Government employees, self-employed, commission-only workers, seasonal workers, family workers

Collective bargaining contracts are exempt. Congressionally granted ERISA exemption


Hawaii Resident Population Age 19-64

Military, Not-in-Labor-Force, Unemployed,Uncompensated Worker, Zero Hours, or Variable Hours Civilian Workers Receiving Compensation

1-99 Hours Per Week

Private Employees Self-Employed Government Employees

Collective Bargaining Non-Collective Bargaining

Hawaii Adults Age 19-64by Sector of Employment


Summary of Survey Findings Hawaii has more private-sector employees with

Employer Sponsored Insurance (ESI). More employees have their own ESI. Fewer employees have ESI from their spouse. Employees’ Contributions subject to 1.5%-of-Wages-Rule Single Coverage Mandatory-Family Coverage Optional

Hawaii has more part-time employees working fewer than 20 hours per week. Most pronounced for low-wage employees and employees

without ESI. 20-Hour Rule


Employee Contributions as a Percent of Family Coverage Premiums by Average Wage of Work Force: Hawaii and United States, MEPS-IC 2004

20.8%

39.3%

23.9%27.6%27.9%

21.8%24.9% 24.4%24.2%

29.1%

0%5%

10%15%20%25%30%35%40%45%

Quartile I QuartileII

QuartileIII

QuartileIV

Total

Average Wage SOURCE: Agency for Healthcare Research and Quality, Center for Financing, Access and Cost Trends, Medical Expenditure Panel Survey-Insurance Component.


Employee Contributions as a Percent of Single Coverage Premiums by Average Wage of Work Force: Hawaii and United States, MEPS-IC 2004

9.4%11.4% 9.7% 10.0%9.2%

15.9%17.2% 18.1%21.0% 20.6%

0%

5%

10%

15%

20%

25%


QuartileIII

QuartileIV

Total



Percent of Private-Sector Non-Collective Bargaining Employees with their own ESI: CPS ASEC 1988-2005

69.89%59.72%

0%10%20%30%40%50%60%70%80%

US Hawaii

Perc

ent w

ith E

SI.


Percent of Private-Sector Non-Collective Bargaining Employees with Spouse’s ESI:CPS ASEC 1988-2005

9.96%12.32%

0%

2%

4%

6%

8%10%

12%

14%

US Hawaii

Perc

ent w

ith S

pous

es E

SI.

--


Percent of Private-Sector Non-Collective Bargaining Employees with no ESI:CPS ASEC 1988-2005

20.15%

27.89%

0%

5%

10%

15%

20%

25%

30%

US Hawaii

Perc

ent w

ith n

o ES

I.


0.1

.2.3

Den

sity

0 20 40 60 80 100Hours Worked

Hawaii U.S.

Probability Density of Non-Collective Bargaining Private-Sector Employees by Hours Worked Per Week: CPS ASEC 1995-2005

Hawaii sample size=6,450

49 States & DC sample size=528,284


Hours Worked per Week by Employees with ESI from their own Employer: Hawaii vs. US

0.2

.4.6

Den

sity

0 20 40 60 80 100Hours

Hawaii US

Probability Density of Employees with ESI by Hours Worked per Week: CPS ASEC 1988-2005, Private-Sector Non-Collective Bargaining

Hawaii sample size=5,151

49 States & DC sample size=373,275


0.2

.4.6

Den

sity

0 20 40 60 80 100Hours

Hawaii U.S.

Probability Density of Employees without ESI by Hours Worked Per Week: CPS 1988-2005, Private-Sector Non-Collective Bargaining

20 hour effect

Hawaii sample=1,354

49 States & DC sample=174,833


Hours Worked per Week by High-Wage Employees: Hawaii vs. US

0.0

05.0

1.0

15.0

2

Den

sity

0 20 40 60 80 100Hours

US HI

Probability Density of Private-Sector Non-Collective Bargaining Employees by Hours Worked per Week—Hawaii vs. US:High-Wage Employees, CPS Basic Monthly Survey 1994-2005


Hours Worked per Week by Low-Wage Employees: Hawaii vs. US

0

.005

.01

.015

.02

Den

sity

0 20 40 60 80 100Hours

US HI

Probability Density of Private-Sector Non-Collective Bargaining Employees by Hours Worked Per Week—Hawaii vs. US:Low-Wage Employees, CPS Basic Monthly Survey 1994-2005


Percent of Private Establishments that Offer Health Insurance by Average Wage of Work Force: Hawaii and United States, MEPS–IC 2003

100.0%88.2%

90.2% 86.2%77.8% 79.7%72.0%

56.2%39.0%

59.1%

0%20%

40%60%80%

100%120%


QuartileIII

QuartileIV

Total



Percent of Private Establishments that Offer Health Insurance by Average Wage of Work Force: Hawaii and United States, MEPS-IC 2004

95.3%93.8%96.5%

82.6%

59.6%79.5%70.7%

55.1%37.5%

57.7%

0%20%40%60%

80%100%120%


QuartileIII

QuartileIV

Total



Estimated Annual Nominal Growth Rates: MEPS-IC 1996-2004UH Non-Linear Discrete-Time EstimatesFamily Premiums

Hawaii 6.34% US 9.85%

Single Premiums Hawaii 5.43% US 8.96%


Year Hawaii-Actual US-Actual Hawaii-Predicted US-Predicted1996 5319.26 4953.68 5228.19 4737.19 1997 5337.13 5332.29 5559.47 5203.78

1998Note: The 1998 MEPS-IC sample

for Hawaii is too small to compute reliable estimates

5590.41 5911.74 5716.31

1999 5539.34 6058.12 6286.33 6279.33 2000 6391.68 6772.47 6684.65 6897.81 2001 7405.92 7508.94 7108.22 7577.20 2002 7768.24 8469.01 7558.62 8323.51 2003 7886.84 9248.92 8037.56 9143.32 2004 8580.00 10006.00 8546.85 10043.88 2005 9088.41 11033.13 2006 9664.29 12119.83 2007 10276.65 13313.55

Average Family Premiums in Hawaii and US: 1996-2004 MEPS-IC Actual2005-2007 UH Projection


Family Premium Trend Line: Hawaii and US 1996-2007, University of Hawaii EstimatesBased on MEPS-IC 1996-2004

0

2000

4000

6000

8000

10000

12000

14000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

HawaiiUSHI-PredictedUS-Predicted


Year Hawaii-Actual US-Actual Hawaii-Predicted US-Predicted1996 2005.45 1991.64 2060.53 1881.68 1997 2021.94 2050.82 2172.47 2050.20

1998Note: The 1998 MEPS-IC sample for

Hawaii is too small to compute reliable estimates

2174.35 2290.49 2233.82

1999 2207.89 2324.76 2414.92 2433.88 2000 2747.87 2654.67 2546.11 2651.85 2001 2698.29 2889.19 2684.43 2889.35 2002 2722.89 3188.90 2830.26 3148.12 2003 3019.83 3481.22 2984.01 3430.07 2004 3119.00 3705.00 3146.12 3737.27 2005 3317.03 4071.98 2006 3497.23 4436.66 2007 3687.22 4834.01

Average Single Premiums in Hawaii and US: 1996-2004 MEPS-IC Actual2005-2007 UH Projection


Single Premium Trend Line: Hawaii and US 1996-2007,University of Hawaii EstimatesBased on MEPS-IC 1996-2004

0

1000

2000

3000

4000

5000

6000

HawaiiUSHI-PredictedUS-Predicted


Summary of Experimental Results Sherstyuk, et al. (2006) forthcoming in Economic

Inquiry. Without a Employer Mandate

There is some behavioral inefficiency in labor market matching and insurance coverage.

With a Employer Mandate Coverage increases overall. Labor market sorting between part-time and full-time. Increases coverage among those who should be insured, but

otherwise would be uninsured. Causes some workers to be over-insured.

Partial Mandate is superior to a Full Mandate 20-hour rule is a labor market safety valve.


Mahalo!This research is funded in part by

U.S. Department of Health and Human Services Health Resources & Services Administration

State Planning Grant Hawaii State Department of Health.

state coverage initiatives workshop for state officials august 3-4, 2006 conrad hilton hotel

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