Research Examines How Double-Income Couples Choose Health Insurance, continued
Abraham and Royalty’s study has three phases:
The first phase is a descriptive study to examine what health insurance options are available to two-earner households, both in terms of access to coverage and generosity, and how the options are different from single-earner households.
The second phase studies the joint health insurance outcomes of two-earner couples. Specifically, they look at the behavior of husbands and wives with respect to having offers of coverage and taking up coverage through one or both employers.
The last phase examines how insurance options affect employment decisions. For example, if one partner has health insurance through an employer, does the other partner choose not to work? Or, if one partner has health insurance, does the other choose a job that is not likely to have health insurance as a fringe benefit, such as work in a small establishment or part-time employment?
Abraham and Royalty used data from three years of the Medical Expenditure Panel Survey to conduct their analyses. The primary challenge of understanding coverage and employment decisions is to find a way to determine whether partners chose to work based on insurance availability versus other factors.
People are often attracted to similar people. A couple of high-ability, ambitious individuals may choose to work whether they need to or not, and health insurance may not be a deciding factor. To identify the “behavioral response”—how health insurance options affect employment decisions—Abraham and Royalty compared the decisions of married two-earner couples with unmarried, opposite-sex couples living together. In theory, both categories represent sets of people who are attracted to similar people. But in general, unmarried people don’t have the option of being covered under their partner’s insurance, while married couples do.
The study found that two-earner couples appear to make joint decisions about employment that depend on each other’s insurance options. By examining health insurance at a household level and comparing married couples to unmarried couples, Abraham and Royalty’s study provides a broader perspective that may allow for better insurance measurement to inform public policy on employer-based health insurance.
