In the May 2016 Journal of Health Economics, Amanda Kowalski (Yale University) and her co-author Jonathan Kolstad (University of California, Berkeley) published findings from their SHARE-funded modeling work examining the impact of Massachusetts’ 2006 “mandate-based” health reforms. The analysis released this month evaluates the impact of Massachusetts’ reforms on the labor market and individual welfare in the state, employing a model that uses data from the Survey of Income and Program Participation (SIPP) and takes into account the state’s individual mandate, employer mandate, and expansion of public coverage.
The researchers found that full-time workers who gained employer-sponsored coverage under the Massachusetts health reforms earned $2,812 less in wages per year than they would have if they had not gained such coverage. Since individuals were willing to accept lower wages in exchange for health coverage, the labor market impact of mandate-based reform was smaller than would be expected using other policy levers such as a wage tax.
Since the Massachusetts reforms have the same key features as the ACA, the findings from this analysis have broad implications for coverage on a national level. Namely, we can anticipate that individuals will continue to demand employer-sponsored insurance under the ACA, and other sources of coverage will not crowd-out the employer-sponsored insurance market.
Learn more about Amanda Kowalski’s SHARE project here, including a paper on the welfare gain from the 2006 Massachusetts individual mandate – for which she and her co-authors received the 2016 National Institute of Healthcare Management Research Award.