EmployerSponsored
Insurance at Small Firms in Blue and Red States
Question: How did the role of employersponsored
insurance at small firms differ in blue states versus red states in 2013 (the
year prior to the enactment of state exchanges) and 2015 (the year after
enactment of state exchanges?) How did
the change in reliance on employersponsored insurance differ for blue and red
states over this time period?
Data: The information on the share of employees at
firms with fewer than 10 employees with offers of employersponsored health
insurance by state was obtained from the MEPSIC database. Here is a link to this data.
The blue versus red distinction variable was based on the
results of the 2012 election. I am a
politics junkie so I know that by heart.
I am putting data for some of my statistics problems at my statistical
resources blog. Go here for this data.
Methodology: I consider this question with three simple
regression models. The dependent
variable in the three models are  (1)
share of smallfirm employees with ESI offers in 2013, (2) share of smallfirm employees with ESI
offers in 2015, and (3) the difference in share of small firm employees with
ESI offers (20152013).
The explanatory variable in all three regressions was a
dummy variable set to 1 if the state was blue and set to 0 if the state to red.
The intercept term of this model is our estimate of the
average of the dependent variable in red states.
The sum of the intercept and the blue dummy coefficient is
our estimate of the dependent variable in blue states.
The estimate of the blue dummy coefficient is the difference
in the dependent variable for red and blue states.
The Regression
Coefficients:
The regression coefficients for the three models are
presented in the table below.
Impact of Blue Versus Red
Political Status On
Percent of Firms With ESI
Offers


% employees at small firms with ESI offers in 2013


Variable

Coefficient

tstatistic

pvalue

Blue2012

0.098

3.86

0

_cons

0.304

17.06

0

% employees at small firms with
ESI offers in 2015


Variable

Coefficient

tstatistic

pvalue

Blue2012

0.090

3.1

0.003

_cons

0.260

12.83

0

Change in % of employees
at small firms
with ESI offers


Variable

Coefficient

tstatistic

pvalue

Blue2012

0.009

0.46

0.648

_cons

0.044

3.36

0.002

Discussion of Results:
The difference in percent of employees at firms with fewer
than 10 employees who have ESI offers was significantly higher in blue states
than red states in both 2013 and in 2015.
The point estimate of the difference in this percentage was 9.8
percentage points in 2013 and 9.0 percentage points in 2015.
The difference (20152013) in percent of employees with ESI
offers is negative. The point estimate
is 0.044 for red states and 0.035 for blue states.
Discussion of
Political Implications:
The ACA state exchanges created an alternative for
smallfirm employerbased insurance.
The regression results presented here suggest that the new state
exchanges are more important for employees in red states than blue states
because small firms in blue states are more likely to provide offers of health
insurance.
Other Statistical Issues:
It would be interesting to run these regressions on the blue
classification from the 2016 election.
The regressions could be estimated with the log of the odds as the
dependent variable. A broader ranged of
crossstate health insurance regressions should be considered.
Concluding Remark:
The results presented here pertain to only one health
insurance statistics. I strongly
suspect that redstate are more dependent on state exchanges in many other
dimensions.
To paraphrase Alanis Morisette, “Isn’t it ironic that
redstates will probably lose much more from repeal of ACA than blue states.”
Authors Note: People interested in the ACA debate should
consider some of my posts at my health insurance blog. Here is a post on a plan that could improve
upon the current ACA.
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