1. Comments on “The Impact of Massachusetts Health Insurance Reform on Labor Mobility” by Norma B. Coe, Wenliang Hou, Alicia H. Munnell, Patrick J. Purcell, and Matthew S. Rutledge
Nadia Karamcheva, Congressional Budget Office*
Retirement Research Consortium Meeting
August 2017, Washington DC
*The views expressed in this presentation are the author’s and should not be interpreted as the views of the Congressional Budget Office.

2. Aim of the Study: to determine how MA health reform has affected job mobility and exits from employment
Policy relevance: Similarities between MA reform and the Patient Protection and Affordable Care Act (ACA)
Experience of workers in MA provides evidence for how ACA might affect labor markets

3. Policy Relevance
Historic decline in prime-age labor force participation
“Job lock” highly debated in public policy
Knowing the prevalence of “job lock” can help assess policies that weaken the link between employment and health insurance
Do policies remove an inefficient constraint on employment/retirement – what are the welfare effects?
Fiscal effects (changes in tax revenue from labor supply decreases)
10/16/2017

4. How Might MA Health Reform Affect Labor Mobility?
Prime work-age individuals
Workers subject to “job lock” more likely to change employers; to switch to self-employment; to switch from large to small firms
Individuals near retirement
Potentially more affected – lower-priced/more available insurance alternatives could lead to increased employment exits or switches to bridge jobs

5. Is MA Health Reform Working Against Policies Aimed at Delaying Retirement?
Previous policies adopted to incentivize delayed retirement and counter increasing life expectancy.
Increases in Social Security full retirement age
End of Social Security earnings test after full retirement age
Increase in delayed retirement credit
End of mandatory retirement
Could MA health reform have affected those previous policies aimed at delaying retirement?

6. Older adults today are participating and working more than their counterparts 10 or 20 years ago
Labor Force Participation Rates, MEN
Source: Author’s calculations from the Current Population Survey.

7. Older adults today are participating and working more than their counterparts 10 or 20 years ago
Labor Force Participation Rates, WOMEN
Source: Author’s calculations from the Current Population Survey.

8. Older adults today are participating and working more than their counterparts 10 or 20 years ago
Source: Richard Johnson and Nadia Karamcheva, “What Determines Gradual Retirement? Differences in the Path to Retirement Between Low- and High-educated Workers”, Presented at ASSA Annual Meeting, January 2017, Chicago IL.
Note: Full-time workers Ages 51 to 75 in the 1992 to 2010 HRS.

9. Empirical Evidence on Health Insurance and Retirement
Employer-sponsored health insurance
Decreases probability of retirement
Retiree health insurance
Increases probability of retirement for some workers; but also increases probability of phased/partial retirement. Individuals with phased/partial retirement spells significantly delay their full exit from the labor force
Source: Johnson, Richard and Nadia Karamcheva, “What Determines Gradual Retirement? Differences in the Path to Retirement Between Low- and High-educated Workers”, Presented at ASSA Annual Meeting, January 2017, Chicago IL.
Note: Full-time workers Ages 51 to 75 in the 1992 to 2010 HRS. Next period probability of transitioning from full-time work to one of four states

10. Empirical Evidence on Health Insurance and Retirement
Among workers ages 51 to 75
¾ have health insurance through their employers
> 1/3 have retiree health insurance through their employers
Source: Richard Johnson and Nadia Karamcheva, “What Determines Gradual Retirement? Differences in the Path to Retirement Between Low- and High-educated Workers”, Presented at ASSA Annual Meeting, January 2017, Chicago IL.
Note: Full-time workers Ages 51 to 75 in the 1992 to 2010 HRS.

11. Coe, Hou, Munnell, Purcell, and Rutledge (2016)
Uses high quality employer-employee administrative data for the years (pre-) and (post-reform)
Difference-in-difference estimation
Control states: Maine, New Hampshire, Rhode Island, Connecticut, and New York
Employment transitions measured annually
Identified by changes in EINs (employer identification number)
No information on individuals’ access to employer-provided health insurance

12. Empirical Results
-> MA reform seems to be associated with reduced mobility and reduced exit from employment
-> Results even stronger for the age group
Employer changes
Lower in MA after reform
Transitions from large to small firm
Transitions from small to large firm
Insignificant results
Employment exits

13. Why No Effect or Effect Opposite to Theory?
Insurance through the MA Connector might
be a poor substitute for private employer-sponsored insurance
not be similar to retiree health insurance (usually part of a comprehensive compensation package, often in combination with a defined benefit plan
Reform coincides with the Great Recession
Is the difference-in-difference comparison valid?
Are trends over time the same?

14. Why No Effect or Effect Opposite to Theory
Why No Effect or Effect Opposite to Theory? Are the New England States Valid Controls?

15. Critiques and Suggestions
Employer transitions and exits out of employment defined as changes in EINs and earnings>=4 quarters of coverage
Verify assumption that employer changes in EINs are similar across states?
Some employer-to-employer transitions might be due to layoffs (unemployment increased significantly over the period, more so in the control states)
Use quarters of coverage to identify voluntary vs involuntary transitions? Track individuals who did not experience unemployment
Analysis tracks annual transitions – for retirement-age individuals “permanent” retirement might be more informative
Better identify the intent-to-treat groups (info from the employer side – availability of health insurance?)
Most affected groups: Had employer health insurance while working, but not if left (e.g no coverage through spouse’s employment, no retiree health insurance)

16. Critiques and suggestions
Account for ongoing trend towards delayed retirement (is it similar across states?)
Triple difference – compare with the group 65+ which should not be affected
More sensitivity analyzes
Exclude later years ( ) when economic conditions diverge between MA and control states
Examine results by earnings groups

17. Conclusion Carefully done paper – thorough and well-written
Innovative use of administrative data
Continuous Work History Sample (CWHS)
Longitudinal Employee-Employer Data (LEED)
Needs more discussion on what could be behind the counterintuitive results
Looking forward to seeing more results for specific groups

18. Conclusion We are at point in time of significant policy change
More changes are likely in the next few decades
Health Insurance reform
Changes to address the funding shortfall of the Old Age, Survivors and Disability Insurance program (OASDI)
More research is needed to inform the policy community about what changes to the health system might mean for the future