Will Employers Drop Health Insurance Coverage Because of the Affordable Care Act?

Posted: 25 Mar 2014

See all articles by Thomas C. Buchmueller

Thomas C. Buchmueller

University of California - Paul Merage School of Business - Economics/Health Care; University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Colleen Marie Carey

Cornell University - Department of Policy Analysis and Management

Helen Levy

University of Michigan at Ann Arbor - Institute for Social Research (ISR); National Bureau of Economic Research (NBER)

Date Written: September 10, 2013

Abstract

Since the passage of the Affordable Care Act, there has been much speculation about how many employers will stop offering health insurance once the act’s major coverage provisions take effect. Some observers predict little aggregate effect, but others believe that 2014 will mark the beginning of the end for our current system of employer-sponsored insurance. We use theoretical and empirical evidence to address the question, “How will employers’ offerings of health insurance change under health reform?” First, we describe the economic reasons why employers offer insurance. Second, we recap the relevant provisions of health reform and use our economic framework to consider how they may affect employers’ offerings. Third, we review the various predictions that have been made about those offerings under health reform. Finally, we offer some observations on interpreting early data from 2014.

Keywords: Affordable Care Act, employer-sponsored health insurance

Suggested Citation

Buchmueller, Thomas C. and Carey, Colleen Marie and Levy, Helen, Will Employers Drop Health Insurance Coverage Because of the Affordable Care Act? (September 10, 2013). Health Affairs, Vol. 32, No. 9, 2013, Available at SSRN: https://ssrn.com/abstract=2413997

Thomas C. Buchmueller

University of California - Paul Merage School of Business - Economics/Health Care ( email )

Irvine, CA 92697-3125
United States

HOME PAGE: http://web.gsm.uci.edu/~tbuchmu/

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Colleen Marie Carey (Contact Author)

Cornell University - Department of Policy Analysis and Management ( email )

Ithaca, NY
United States

Helen Levy

University of Michigan at Ann Arbor - Institute for Social Research (ISR) ( email )

Ann Arbor, MI 48106-1248
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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