Health and Human Capital Effects of Mandated Dependent Insurance Coverage

Abstract

A large literature studies the effects of young adult insurance eligibility expansions which is a major provision of the Affordable Care Act (ACA). I provide new evidence on the effects of dependent coverage mandates by compiling original legal data on state mandates from the 1980s to present. Using data from the Current Population Surveys and American Community Surveys, I estimate the effects of state mandates and re-estimate the effects of the ACA mandate controlling for state policies. I find that state mandates had larger effects on insurance coverage than previously thought and that estimates of the ACA mandate are robust to controls for state policies. I find that state mandates led to increased educational attainment, did not affect self-rated health and had some effects on the labor decisions of young adults. I find that single parents who have employer sponsored insurance are more likely to switch to a family plan following a policy which extends eligibility to an adult child. I find that employers did not offset increased costs through wages but rather adjusted by being less likely to pay for insurance plan premiums. Turning to hospitalizations, I use the Nationwide Inpatient Sample to estimate the effects of state mandates on young adult inpatient stays. I find increased payment through private insurance for young adults and a decrease in the likelihood of self-pay. I find evidence of an increase in the intensity of care as length of stay increased, number of procedures increased and charges increased. I find that young adults are more likely to have a mental health visit and the mental health visit sub-sample is more likely to pay with private insurance. Lastly, I explore how the ACA mandate affected HIV testing among young adults. Using the Behavioral Risk Factor Surveillance System I find the mandate increased the likelihood of young adults ever having and HIV test and that they were more likely to be tested at a private doctor or HMO office.