The Affordable Care Act and Disability Insurance

48 Pages Posted: 13 Jun 2014 Last revised: 2 Apr 2015

See all articles by Yue Li

Yue Li

SUNY at Albany, College of Arts and Sciences, Economics

Date Written: March 29, 2015

Abstract

This paper develops a general equilibrium model that features the decisions of health care consumption, health insurance take-up, Disability Insurance (DI) claims to evaluate the long-term effects of health care reforms. The model suggests that the combination of insurance subsidies, an individual mandate, and Medicaid expansion reduces the uninsured rate and DI inflows. Reduced cost-sharing of individual insurance, however, raises the uninsured rate and individual insurance premiums. Behavioral changes in insurance take-up and health care consumption explain 78 percent of the premium increase associated with reduced cost-sharing. DI affects the individual insurance market by inducing market exits of individuals with either high or low demand for health care.

Keywords: Health Capital Accumulation, Health Insurance, Disability Insurance, General Equilibrium

JEL Classification: E21; E62; H51; H55; I13; I18

Suggested Citation

Li, Yue, The Affordable Care Act and Disability Insurance (March 29, 2015). Available at SSRN: https://ssrn.com/abstract=2448955 or http://dx.doi.org/10.2139/ssrn.2448955

Yue Li (Contact Author)

SUNY at Albany, College of Arts and Sciences, Economics ( email )

1400 Washington Avenue
Albany, NY 12222
United States

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