Middle Class Welfare: The Pros and Cons of Employer Sponsored Health Insurance: Sources

What’s Wrong with Employer Sponsored Health Insurance

Ed Dolan. 11 6 2018. Niskanen Center.

The Real Reason the U.S. Has Employer-Sponsored Health Insurance

Aaron E. Carroll. 9 5 2017. New York Times.

Column: The health insurance tax exemption makes care more affordable, not less

Joseph White. 8 17 2017. PBS.

Reconnecting health care policy with economics: Finding & fixing distortive incentives

1 4 2018. American Enterprise Institute

Column: A tax reform President Trump should like, and you should too

Yevgeniy Feyman and Charles Blahous. 8 16 2017. PBS.


Reform The ‘Cadillac Tax’ To Target Rich Benefits, Not High Costs

Joseph White. 3 16 2016. Health Affairs.

Rethinking the Affordable Care Act’s “Cadillac Tax”: A More Equitable Way to Encourage “Chevy” Consumption

Sarah Nowak and Christine Eibner. 12 18 2015. The Commonwealth Fund.


Is the tax exclusion for employer-sponsored insurance regressive?

Harold Pollack. 3 29 2017. The Incidental Economist.

Health Care Reform (U1025)

Milton Friedman. 1992. Free To Choose Network.

Tax Debate

Susan Jaffe. 7 9 2009. Health Affairs.


Employer Premiums and the ACA

Lori Robertson. 3 14 2017. FactCheck.ORG

Trends in Employer Health Care Coverage, 2008–2018: Higher Costs for Workers and Their Families

Sara R. Collins, David C. Radley, and Jesse C. Baumgartner. 11 21 2019. The Commonwealth Fund.


Government-Funded Health Insurance Is Essential for the Free Market’s Survival

Allan Golombek. 6 17 2019. RealClearMarkets.


Why your employer-sponsored insurance may ultimately not be good for you

Dana Goldman. 9 9 2019. The Conversation.


Job Lock and Employer-Provided Health Insurance:Evidence from the Literature

Dean Baker. 3 2015. AARP.


Does non-employment based health insurance promote entrepreneurship? Evidence from a policy experiment in China

Lulu Liu and Yuting Zhang. 3 2018. Journal of Comparative Economics.


How Doctors Broke Health Care

Christy Ford Chapin. 5 2020. Reason Magazine.

Employer-Sponsored Insurance, Health Care Cost Growth, and the Economic Performance of U.S. Industries

Neeraj Sood, Arkadipta Ghosh, and José J Escarce. 10 2009. Health Services Research.


Perspective: Who Pays For Employer-Sponsored Health Insurance?

Linda J. Blumberg. 12 1999. HealthAffairs.

Employer-Sponsored Health Insurance and Health Reform

Th National Bureau of Economic Research.


Employer-sponsored health insurance isn’t going away. That’s a good thing

Rajaie Batniji. 9 4 2018. STAT.

The Decline of Employer-Sponsored Health Insurance

David Blumenthal. 12 5 2017. The Commonwealth Fund.


Employer-SponsoredHealth Insurance and thePromise of HealthInsurance Reform

Thomas C. Buchmueller and Alan C. Monheit. Summer 2009. Inquiry.


Funding Employer-based Insurance: Regressive Taxation and Premium Exclusions

Zhigang Feng and Anne Villamil. 1 31 2018.


“U.S. employer-based health insurance (EHI) premiums are not subject to income or pay-roll taxes. This is regressive taxation because higher income individuals face higher marginaltax rates, which gives a higher EHI subsidy. We show this regressive policy mitigates mis-allocation between firm and self-employment from non-contractible heterogeneity in talent and health shocks. In our general equilibrium model, removing tax exclusion raises insurance premiums by 67%, coverage falls to 26.9%, and welfare decreases 1.9% due to reduced risk sharing and misallocation. If tax exclusion is extended to private insurance, coverage increases to 97.2%, workers’ taxes fall, and welfare increases 0.3%.”

Employment-based health insurance and misallocation: Implications for the macroeconomy

David Chivers, Zhigang Feng, and Anne Villamil. 1 2017. Review of Economic Dynamics.


“Most working-age Americans obtain health insurance through the workplace. U.S. law requires employers to use a common price, but the value of insurance varies with idiosyncratic health risk. Hence, linking employment and health insurance creates a wedge between the marginal cost and benefit of insurance. We study the impact of this wedge on occupational choice and welfare in a general equilibrium model. Agents face idiosyncratic health expenditure shocks, have heterogeneous managerial and worker productivity, and choose whether to be workers or entrepreneurs. First, we consider a private insurance indemnity policy that removes the link between employment and health insurance, so only ability matters for occupational choice. By construction, this is the most efficient policy. We find a welfare gain of 2.28% from decoupling health insurance and employment. Second, we tighten the link by increasing employment-based health insurance from the current U.S. level of 62% to 100%, and find a welfare loss of – 0.61%.”

Employment-based health insurance and aggregate labor supply


Zhigang Feng and Kai Zhao. 10 2018. Journal of Economic Behavior & Organization.

“We find that the employment-based health insurance system provides Americans with an extra incentive to work and work full-time. In a calibrated version of the model, we assess the extent to which the different health insurance systems account for the differences in employment rate and full-time/part-time shares of workers between the U.S. and European countries. Our quantitative results suggest that the different health insurance systems can account for a significant fraction of the differences in employment rate and full-time/part-time shares of workers between the two regions. In addition, we find that the employment-based health insurance system is one of the reasons why many Americans work more than Europeans.”



Nga Le, Wim Groot, Sonila M. Tomini, and Florian Tomini. 7 1 2019. International Journal of Manpower.



Let them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange

Leemore Dafny, Katherine Ho, and Mauricio Varela. 1 2010. The National Bureau of Economic Research.


3.5 million workers likely lost their employer-provided health insurance in the past two weeks

Ben Zipperer and Josh Bivens. 4 2 2020. EPI.

Is There a Link Between Employer-Provided Health Insurance and Job Mobility? Evidence from Recent Micro Data

Benjamin W. Chute and Phanindra V. Wunnava. 4 2015. IZA.


Health care is getting more and more expensive, and low-wage workers are bearing more of the cost

Tara Golshan. 9 30 2019. Vox.


Estimates Of Federal Tax Expenditures For Fiscal Years 2019-2023

Joint Committee on Taxation. 12 18 2019.


What are the largest tax expenditures?

Tax Policy Center.


The Fetishization of Employer-Provided Health Care

Libby Watson. 9 27 2019. The New Republic.


Employer Health Insurance Versus Individual Plans

Medical Mutual.


Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2019 to 2029

CBO. 5 2019.


How Can You Afford Health Insurance If You’re Not Subsidy-Eligible?

Louise Norris. 2 22 2020. Verywellhealth.


Do 160 Million Americans Really Like Their Health Plans? Kind Of

Shefali Luthra. 11 21 2019. Kaiser Health News.

Satisfaction with employer-based coverage not guaranteed

Merrill Goozner. 1 25 2020. Modern Healthcare.


Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2019 to 2029

Congressional Budget Office. 5 2 2019.


Myths vs. Facts on Employer Sponsored Health Care Coverage, James Gelfand

James Gelfand. 9 28 2017. The Alliance.

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