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Monday, October 31, 2016

Proposed Research on State Health Insurance Exchanges

Proposed Research on the Role of State
Health Insurance Exchanges

David Bernstein
Denver Colorado
202 413 5492

Abstract: This research proposal involves working with recently released survey data to evaluate the performance of state exchanges used to provide health insurance for people who do not have access to employer-based health insurance.

The ACA created state exchange market places in an attempt to provide health insurance to working-age adults and their families without an offer of employer-sponsored insurance.  However, even after the enactment of the Affordable Care Act, most working-age U.S. citizens and their dependents obtain their health insurance through their employer.

The debate over the ACA during the current political season has been very general – repeal versus tweak or perhaps create a government option.  However, the recent withdrawal of major insurance firms from several state exchanges and large premium increases in many states suggests the need for some changes to the rules governing state health exchanges.

Under current rules, state-exchange market places are less attractive to most households than employer-based insurance.   Employers generally pay a large share of health care premiums and only some households receive tax credits for policies sold on state exchanges.   The employer mandate prevents many people from applying for insurance or receiving tax subsidies for insurance purchased on state exchanges.   As a result, state exchange health insurance markets provide a relatively small share of health insurance to the working-age population and remain the poor cousin of employer-based insurance. 

There now exists national survey data providing a lot of information about the demographic characteristics, health status, health care utilization, insurance details and financial situation of people who obtained their health insurance through the new state exchanges.  The availability of this data allows researchers to evaluate state exchanges, make comparisons to other market places and forms of insurance in order to assist policymakers with their ongoing discussions.

Potential Questions:  

Question One: Does the age profile of people insured in state exchanges differ from the age profile of people with employer-based insurance?  If so, why?

I have published some preliminary results on this issue on my health care blog.  A description of the post and a link are presented below.

Age of people with state-exchange and employer-sponsored health insurance:

Post uses data from the National Health Interview Survey (NHIS) to compare the age distribution of people with state-exchange insurance and people with employer-sponsored insurance.   I find that a higher proportion of children and young adults have employer-sponsored insurance than state exchange insurance.   This stems from the fact that people with employer-sponsored insurance tend to have more children and young adult dependents who are eligible to remain on their parent’s health plan. 

A separate examination of the age distribution of insurance people over age 26 for the two health insurance venues was presented.   The share of the population between 56 and 65 of the over-26 population was larger for employment-based insurance than for state-exchange insurance.

The younger age of the employer-based insurance does not appear to be a consequence of younger workers choosing employment-based coverage.  Rather, the younger age of the employer-based market is the consequence of the larger number of dependents getting insurance from this market.

Question Two:  Does the health profile of people enrolled in state-exchange insurance differ from the health profile of people with employment-based insurance? If so, why?  Are people in state-exchanges more or less affluent than people with employer-based insurance?

Spoiler Alert:  I find that people with employer-based coverage are a lot more affluent and report to be in better health than people with state-exchange insurance.  Future work will look at prevalence of actual health conditions and health expenditures.   Find the preliminary results below:

I also find that the prevalence of diabetics and the prevalence of diabetics with complications (eye problems and kidney problems) are higher in the state-exchange market than in the employer-based health insurance market.

Question Three:  Do people with state-exchange insurance have higher out-of-pocket costs than people with employer-based insurance? Is this difference the result of differences in health plan characteristics or other factors?  To what extent are out-of-pocket costs for people with health insurance obtained on state exchanges offset by ACA subsidies?

Question Four:  Are people with state-exchange insurance more likely to defer health care procedures than people with employer-based coverage?  If so, why?

Question Five: Do people with insurance on state exchanges have more trouble finding primary care doctors or specialists than people who obtain health insurance through their employer?   Are people with state exchange insurance more dependent on emergency room services than people with employer-based coverage?

Question Six:  Have state exchanges reduced job lock and increased access to health insurance for entrepreneurs?

Question Seven:  Are people insured on state exchanges more likely to only hold insurance for part of the year than people with employer-sponsored insurance?

Research design, data sources and analytical strategies:

The major sources of information used in the proposed study are the National Health Interview Survey and the Medical Expenditures Panel.

The National Health Interview Survey:  The National Health Interview Survey has information available for 2014 and 2015, two full years since the creation of state exchanges, and part of 2016.   The survey is organized into several different files -- family, household, injury, person, child, adult and adult cancer.   The most important files for purpose of studying ACA issues are the person file and the family file.   The person file used to generate my blog post on age differences between state exchangers and employer-based insurance has a bit less than 55,000 respondents.  Information from the person file can be merged with information on the family file.

The Medical Expenditures Panel Survey: The Medical Expenditures Panel Survey (MEPS) has information on only one year, 2014, since the implementation of state exchanges.   Statistics in the codebook reveal that only a bit over 600 people in a sample of around 35,000 people obtained their health insurance through state exchanges in 2014.  2014 was the first year for state exchanges, hence, many people interviewed early in the year had probably not yet signed up for ACA.  It is likely that an analysis based on early 2014 data understates the ultimate impact of the ACA and state exchanges.  Analysis in the MEPS database can also be done at both the household and person level.

The MEPS database is much more detailed than the NHIS database.  Both databases have a lot of information on socio-economic variables, employment history and household income.  Both databases also have substantial but different information on health status and conditions.

The MEPS survey has detailed information on utilization of different types of health care services including both expenditures and number of office visits at different venues (doctors offices, emergency rooms, in-patient and out-patient hospitals.)  This information could help us understand whether utilization patterns of people with state exchange insurance differed from utilization patterns of people with employment-based insurance.

The MEPS contains information on household out-of-pocket expenses, insurance reimbursements and total health expenditures.   This information could be used to determine whether households with state-exchange insurance have less or more financial exposure than households with employment-based insurance.

The MEPS provides detailed information on whether a person has insurance coverage and the type of coverage for each month during the year.   The availability of monthly coverage questions allows researchers to create different insurance coverage ratios including the percent of months with no insurance for the population or different groups in the population.

Note also some people in the MEPS are also in the NHIS and it is possible to link the two files.

My qualifications:  I received my Ph.D. in economics from Purdue University in 1988.   I spent most of my professional career working in the Office of Economic Policy of the U.S. Treasury.  I retired after 25 years of service in government in 2012 and relocated with my family to Denver Colorado in 2014.

I have actively published and presented papers at academic conferences in several areas including health insurance, applied econometrics, the environment, and personal finance.  I have two major health insurance publications – one in the Geneva Papers on Risk and Insurance and the other in the North American Actuarial Journal. 

“Health Care Reinsurance and Insurance Reform in the United States: A Simulation Model” The Geneva Papers on Risk and Insurance, October 2010.

“Intergenerational Transfers and Insurance Policy Design,” The North American Actuarial Journal, July 2008.

I worked extensively with the MEPS database at the U.S. Treasury.  Several of my unpublished empirical papers on health care can be downloaded from my SSRN page. 

Also, I have recently started a new health care blog

Some of the preliminary results related to this grant proposal will appear on my health care blog.

Budget categories:  I am uncertain about what expenses are reimbursable and need guidance on budget questions.  I anticipate a total budget of around $30,000 to $40,000 with around half going to graduate assistants at a local university and around half going to me upon completion of the research.

Concluding Thoughts:  I hope to receive an invitation to submit a more detailed research proposal.   I would use this invitation to reach out to other researchers and build a larger team.

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