Avoiding health insurance crowd-out: evidence from the Medicare as secondary payer legislation

An Empirical Model of Medicare Costs: The Role of Health Insurance, Employment, and Delays in Medicare Enrollment

Medicare is one of the largest federal social insurance programs in the United States and the secondary payer for Medicare beneficiaries covered by employer-provided health insurance (EPHI). However, an increasing number of individuals are delaying their Medicare enrollment when they first become eligible at age 65. Using administrative data from the Medicare Current Beneficiary Survey (MCBS), this paper estimates the effects of EPHI, employment, and delays in Medicare enrollment on Medicare costs. Given the administrative nature of the data, we are able to disentangle and estimate the Medicare as secondary payer (MSP) effect and the work effects on Medicare costs, as well as to construct delay enrollment indicators. Using Heckman’s sample selection model, we estimate that MSP and being employed are associated with a lower probability of observing positive Medicare spending and a lower level of Medicare spending. This paper quantifies annual savings of $5.37 billion from MSP and being employed. Delays in Medicare enrollment generate additional annual savings of $10.17 billion. Owing to the links between employment, health insurance coverage, and Medicare costs presented in this research, our findings may be of interest to policy makers who should take into account the consequences of reforms on the Medicare system.

The effect of the State Children's Health Insurance Program on health insurance coverage

This paper presents the first national estimates of the effects of the SCHIP expansions on insurance coverage. Using CPS data on insurance coverage during the years 1996-2000, we estimate instrumental variables regressions of insurance coverage. Our regression results imply that 9% of children meeting income eligibility standards for SCHIP gained public insurance. While low, our estimates indicate that states were more successful in enrolling children in SCHIP than they were with prior Medicaid expansions that were focused on children just above the poverty line. Crowd-out of private health insurance was estimated to be nearly 50%, which is in line with estimates for the Medicaid expansions of the early 1990s. In addition, state anti-crowd-out provisions in the form of waiting periods were found to significantly affect both take-up and crowd-out.

Challenges and options for increasing the number of Americans with health insurance

This paper provides an overview of the issues confronting policymakers who want to develop programs to help working Americans obtain health insurance. It sets the stage for the following 10 articles, which detail a variety of proposals to offer subsidies and financial incentives to people so they will purchase health coverage. This paper examines challenges to covering the uninsured, describes principles that should be used in assessing policy proposals aimed at this purpose, and evaluates the main strategies for coverage expansions. The evaluation of proposal categories also provides estimates of the costs and consequences of specific proposals described in the other papers.