Panel Paper: Early Effects of the ACA On Insurance Outcomes: Evidence From the 2010 Dependent Coverage Mandate

Friday, November 9, 2012 : 1:00 PM
Pratt B (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Yaa Akosa Antwi, Indiana University-Purdue University Indianapolis, Asako Moriya, Indiana University and Kosali Simon, National Bureau of Economic Research

The mandated extension of dependent employer coverage to older children was one of the earliest implemented provisions of the 2010 Affordable Care Act. Using data from January 2009 - March 2011 from the Survey of Income and Program Participation (SIPP), and double and triple differences estimation methods, we analyze the impact of this provision on insurance coverage rates and employment patterns of young adults aged 19 to 25 years relative to those slightly younger and slightly older who are not directly affected by the law.  We find that the ACA provision raised dependent insurance rates of young adults considerably. We also find preliminary evidence of greater flexibility in the labor market in the form of increased turnover rates. Overall, the provision reduced uninsurance among those aged 19 to 25 years by 2.5 percentage points (3.7 percent) by the end of the first quarter of 2011, relative to insurance rates prior to September 2010. In terms of specific forms of coverage, dependent policies through parents increased by 4.6 percentage points (18.7 percent), individually purchased coverage reduced by 0.6 percentage points (10 percent) and own name employer insurance reduced by 2 percentage points (10 percent).  Exploring these results further, we find that the effects are concentrated among those with low marginal costs of dependent coverage.