The Affordable Care Act and Disability Insurance
48 Pages Posted: 13 Jun 2014 Last revised: 2 Apr 2015
Date Written: March 29, 2015
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: Suggested Citation