Employee cost-sharing and the welfare effects of flexible spending accounts

• 成果类型: Article
• 署名作者: Jack, William; Levinson, Arik; Rahardja, Sjamsu
• 署名单位: Georgetown University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2006.04.003
• 发表日期: 2006
• 页码: 2285-2301
• 关键词: health expenditure subsidies; moral hazard; flexible spending accounts

摘要

Flexible Spending Accounts (FSAs) subsidize out-of-pocket health expenses not covered by employer-provided health insurance, making health care cheaper ex post, but also reducing the incentive to insure. We use a cross section of firm-level data to show that FSAs are indeed associated with reduced insurance coverage, and to evaluate the welfare consequences of this shift. Correcting for selection effects we find that FSAs are associated with insurance contracts that have coinsurance rates about 7 percentage points higher, relative to a sample average coinsurance rate of 17%. Meanwhile, coinsurance rates net of the subsidy are approximately unchanged, providing evidence that FSAs are only welfare neutral if we ignore distributional considerations and the deadweight loss of the taxes necessary to finance the subsidy. These results also suggest that FSAs may explain a significant fraction of the shift in health care costs to employees that has occurred in recent years. (c) 2006 Elsevier B.V. All rights reserved.