The effect of Health Savings Accounts on group health insurance coverage

Jinqi Ye

Journal of Health Economics, 2015, vol. 44, issue C, 238-254

Abstract: This paper presents new empirical evidence on the impact of tax subsidies for Health Savings Accounts (HSAs) on group insurance coverage. HSAs are tax-free health care expenditure savings accounts. Coupled with high deductible health insurance plans (HDHPs), they together represent new health insurance options. The tax advantage of HSAs expands the group health insurance market by making health care more affordable. Using individual level data from the Current Population Survey and exploiting policy variation by state and year from 2004 to 2012, I find that HSA tax subsidies increase small-group coverage by a statistically significant 2.5 percentage points, although not coverage in larger firms. Moreover, if the tax price of HSA contribution decreases by 10 cents, small-group insurance coverage increases by almost 2 percentage points. I also find that for older workers or less-educated workers, HSA subsidies are associated with 2–3 percentage point increase in their group insurance coverage.

Keywords: Health Savings Accounts; Tax subsidies; Group health insurance (search for similar items in EconPapers)
JEL-codes: H20 I13 I38 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:44:y:2015:i:c:p:238-254

DOI: 10.1016/j.jhealeco.2015.09.009

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