Will Divestment from Employment-Based Health Insurance Save Employers Money? The Case of State and Local Governments / Jeremy D. Goldhaber-Fiebert, David M. Studdert, Monica S. Farid, Jay Bhattacharya.

Format:

Book

Author/Creator:

Goldhaber-Fiebert, Jeremy D.

Contributor:

National Bureau of Economic Research.

Studdert, David M.

Farid, Monica S.

Bhattacharya, Jay.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20222.

NBER working paper series no. w20222

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

Reforms introduced by the Affordable Care and Patient Protection Act (ACA) build new sources of coverage around employment-based health insurance. But what if firms find it cheaper to have their employees obtain insurance from these sources, even after accounting for penalties (for non-provision of insurance) and employee bonuses (to ensure the shift is cost neutral for them)? State and local governments (SLGs) have strong incentives to consider the economics of such "divestment"; many have large unfunded benefits liabilities. We investigated whether SLGs would save under two scenarios: (1) shifting all employees and under-65-retirees to alternative sources of coverage; (2) shifting only employees whose household incomes indicate they would be eligible for federally subsidized coverage and all under-65-retirees. Full divestment would cost SLGs more than they currently pay, due primarily to penalty costs. Selective divestment could save SLGs nearly $129 billion over 10 years at the expense of the federal government.

Notes:

Print version record

June 2014.