Does the Incidence of Group Health Insurance Fall on Individual Workers?

Authors: Levy H.¹; Feldman R.²

Source: International Journal of Health Care Finance and Economics, Volume 1, Numbers 3-4, September 2001 , pp. 227-247(21)

Publisher: Springer

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Abstract:

Economic models predict that the cost of health insurance is borne by workers. In this paper we ask two questions. First, is cost shifting individual-specific: does a worker with higher expected medical expenses bear this cost? Second, how do explicit employee contributions affect cost shifting? We estimate wage change regressions that include as explanatory variables changes in health insurance coverage, changes in employee premium contributions, health status, and an interaction between health insurance changes and health status. We find no evidence of a significant wage offset at either the individual or group level and conclude that changes in health insurance status are not exogenous.

Keywords: nonwage labor costs; health insurance; compensating wage differentials

Language: English

Document Type: Regular paper

Affiliations: 1: University of Chicagohlevy@uchicago.edu 2: University of Minnesotafeldm002@tc.umn.edu

Publication date: 2001-09-01