An estimated 9.3 million American adults lost health insurance coverage as a result of increased unemployment during the recession of 2007-09, according to a newly published study by researchers at Cornell, Indiana and Carnegie Mellon universities.

The study, titled “The Impact of the Macroeconomy on Health Insurance Coverage: Evidence from the Great Recession,” was published online by the National Bureau of Economic Research. Authors are John Cawley, professor in the College of Human Ecology at Cornell University; Kosali Simon, professor in the School of Public and Environmental Affairs at Indiana University; and Asako Moriya, a recent Ph.D. in economics and public policy at Carnegie Mellon University. The paper can be viewed at: www.nber.org/papers/w17600.

The study finds that roughly nine times as many Americans lost health insurance coverage in the recession of 2007-09 as in the previous recession of 2001. It also estimates that 4.2 million children under the age of 18 gained health insurance coverage during the recession, supporting the idea that government health insurance programs work counter-cyclically, as intended as part of the social safety net. As parents lose jobs and income, more children qualify for coverage through Medicaid and State Children’s Health Insurance Programs.

Other findings include:

– Men were much more likely than women to lose insurance coverage as a result of increases in the unemployment rate, and the effect was strongest for men who were white, older and well educated. Of adults estimated to have lost coverage, 7.1 million were men and 2.2 million were women.

– For men, an increase in the unemployment rate of 1 percentage point was associated with a 1.67 percentage-point decrease in the likelihood of being insured.

– Even for men who didn’t lose their jobs, increases in the unemployment rate were associated with a decreased probability of health insurance coverage. This may be because employers dropped coverage, cut workers’ hours to where they no longer qualified for health insurance, or increased employee premium contributions leading to workers declining the offer of coverage.

– For children under 18, a 1 percentage-point increase in the unemployment rate is associated with a 1.37 percentage-point increase in the likelihood of being insured.

The paper concludes with a “thought experiment” that examines the impact of the 2010 Patient Protection and Affordable Care Act on the relationship between unemployment and insurance coverage. The results imply that, because of the act’s expansion of Medicaid coverage for adults, a higher unemployment rate would not have a significant impact on insurance coverage with the law in place.

Source:Cornell University

Cornell University
Contact: Syl Kacapyr
Phone: (607) 255-7701
vpk6@cornell.edu

Indiana University
Contact: Steve Hinnefeld
Phone: (812) 856-3488
slhinnef@indiana.edu