State Coverage Initiatives Workshop for State Officials 13 August 2006
Session 3: Coverage MandatesPanelist: Jerry Russo
Department of Economics University of Hawaii
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
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]
State Coverage Initiatives Workshop for State Officials 33 August 2006
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/
State Coverage Initiatives Workshop for State Officials 43 August 2006
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
State Coverage Initiatives Workshop for State Officials 53 August 2006
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
State Coverage Initiatives Workshop for State Officials 63 August 2006
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
State Coverage Initiatives Workshop for State Officials 73 August 2006
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
State Coverage Initiatives Workshop for State Officials 83 August 2006
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.
State Coverage Initiatives Workshop for State Officials 93 August 2006
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%
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.
State Coverage Initiatives Workshop for State Officials 103 August 2006
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.
State Coverage Initiatives Workshop for State Officials 113 August 2006
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.
--
State Coverage Initiatives Workshop for State Officials 123 August 2006
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.
State Coverage Initiatives Workshop for State Officials 133 August 2006
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
State Coverage Initiatives Workshop for State Officials 143 August 2006
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
State Coverage Initiatives Workshop for State Officials 153 August 2006
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
State Coverage Initiatives Workshop for State Officials 163 August 2006
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
State Coverage Initiatives Workshop for State Officials 173 August 2006
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
State Coverage Initiatives Workshop for State Officials 183 August 2006
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%
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.
State Coverage Initiatives Workshop for State Officials 193 August 2006
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%
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.
State Coverage Initiatives Workshop for State Officials 203 August 2006
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%
State Coverage Initiatives Workshop for State Officials 213 August 2006
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
State Coverage Initiatives Workshop for State Officials 223 August 2006
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
State Coverage Initiatives Workshop for State Officials 233 August 2006
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
State Coverage Initiatives Workshop for State Officials 243 August 2006
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
State Coverage Initiatives Workshop for State Officials 253 August 2006
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.
State Coverage Initiatives Workshop for State Officials 263 August 2006
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.