The Health and Wealth of a Nation: Employer-Based Health insurance and the Affordable Care Act

Preface

ix Preface The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, provided the first major health care reform in 45 years. The so-called Affordable Care Act (ACA) was enacted to provide high-quality, affordable health care for all Americans. Once all of its provisions become effective, circa 2014, the goal is to ensure that all U.S. citizens receive coverage for essential health benefits. The reform retains the basic structure of our current health care system and assigns shared responsibilities for achieving its goal among employers, insurers, government, and individuals. Employers gain additional responsibilities in providing insurance to workers, with additions ranging from minimum coverage and payment requirements (for large firms) to additional informational requirements. Health insurance providers gain new responsibilities that include new required service provisions, taxes, fees, and reporting obligations. Expanded government responsibilities include creating a new market for insurance—the American Health Benefit Exchanges (referred to henceforth simply as “exchanges”)— and making premium subsidies available to some firms and individuals. Individuals acquire the responsibility of carrying essential health coverage or facing penalties. It is far too soon to assess the impacts of such sweeping legislation. We can, however, examine the potential for change in one area—employment— by examining how firms behaved with respect to employment-based health insurance before ACA deliberations and by using that behavior to predict the changes that might occur once the legislative requirements become fully implemented. It is within this context that the research in this book unfolds. No man is an island, and this research upholds the axiom, for it took a small army of individuals to administer the survey, execute the research, and shape the investigation that produced this study. Funding for the study came primarily from the W.E. Upjohn Institute for Employment Research and the University of California’s California Program on Access to Care. Much of the research and writing was done while I was the executive director of the Human Investment Research and Education (HIRE) Center and a professor and chair of the Department of Economics at California State University, East Bay. Early revisions were undertaken, in part, while I was a visiting researcher at the Public Policy Institute of California, and final revisions were completed while I was employed at Mathematica Policy Research.All institutions provided supportive research environments. The research springs from discussions and joint work with colleagues from many parts of my life. The survey upon which the study is grounded x was initiated because I and Lynn Paringer, a health economist, took different approaches to the study of how firms compensate workers. In the course of our discussions, we structured the design of the survey and the subsequent research agenda. That line of inquiry was abruptly altered in 2010 when the ACA was signed, for it will dramatically change the landscape in which firms offer health insurance. Kevin Hollenbeck and Susan Houseman refocused the research and, in the process, helped produce a more interesting and relevant monograph. I am eternally grateful for their vision and their patience as I struggled with the shift. The early work also benefited greatly from discussions or comments on drafts from Ron D’Amico, Jed DeVaro, Debbie Reed, Steve Woodbury, and anonymous referees. Gary McBride worked with me to ensure the discussions of the tax code were accurate. I only hope I interpreted the information he provided correctly. Finally, Benjamin Jones enhanced the readability of the book with his meticulous editing, and Erika Jackson typeset the manuscript, tables, and figures. A legion of Cal State East Bay students called 2,190 firms to obtain the 1,427 surveys used in this study. Nathan Benedict, Teresa Hoang, Sung Kim, and Mark Sawkar spent a summer piloting the survey and, in the process, helped develop a finely tuned instrument and build processes to support sustained survey efforts. Benedict, Kim, and Sawkar spent the following year surveying firms, training other surveyors, structuring databases, and building and implementing quality assurance processes for data integrity. They were joined in surveying by Helene Bauer, Jens Eichler, Fei Fan, Sandra Filius, Rhoda Freelon, Dawn Guenthardt, Eva Hegemer, Natalie Laqua, Esther Prenzel, Denise Rabe, Ulrike Ruemer, Bilijana Serafemovska, José Luis Spahr, and Danielle Talsma. Ryan Hoadwonic often served as the on-the-spot problem solver while the surveys were in the field and data were being processed. It was only because of the painstaking work of another group of students that the data collected...