Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: The Growing Importance of Measuring the Benefits of Government Provided Health Insurance in the Debate over Its Costs: The Case of Working-Age People with Disabilities

Saturday, November 14, 2015 : 10:15 AM
Zamora (Hyatt Regency Miami)

*Names in bold indicate Presenter

Sean Lyons, Congressional Budget Office, Richard Burkhauser, Cornell University and Jeff Larrimore, Federal Reserve Board
Since 2012 the Congressional Budget Office (CBO) has included the market value of government-provided health insurance coverage in its measures of household income to better estimate changes in the revenue required to pay for future legislation and determine how the benefits from those expenditures are distributed across the income distribution.  We follow CBO methods to capture the impact of greater access to government-provided health insurance for working-age people with disabilities whose value we estimate rose in constant 2010 dollars from $16.5 Billion in 1980 to $151.8 Billion in 2012.  Using this fuller measure of resources we show that the income gap between people with and without disabilities has closed.  We then use shift-share analysis techniques to decompose the growth in household size adjusted income of persons with and without disabilities between trough years in the business cycle over the past three decades.  Our results indicate that between 1983 and 2011 median household income of working age people with disabilities increased by 50.85 percent compared 31.46 percent for working age people without disabilities. Growth in labor earnings was the most important source of income growth for working age people without disabilities. In contrast, growth in the insurance value of Medicare and Medicaid benefits for those receiving either Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) was by far the single most important source of income for working age people with disabilities.