Lost Jobs and Health Insurance : An Analysis of the Impact of Employment Volatility on Firm-Provided Health Insurance

It is an established fact that there are high levels of employment volatility in the United States. Despite the importance of employer-provided benefits in the US health insurance system, the impact of prior job instability on one's future ability to obtain insurance coverage is not well understood. This paper finds a negative relationship between the volatility of a worker's employment and her likelihood of receiving firm-provided health insurance. Previous employment volatility reduces each of the four factors necessary to receive such insurance: a worker's subsequent chances of getting a job, her chances of getting a job in a firm that offers coverage, her chances of staying with the firm long enough to become eligible for coverage, and her ability to take up insurance if offered. The most important impact is on the last: her ability to take up insurance if offered. Lack of employment is not the only, and not even the largest, barrier to individual coverage under this system. This finding has important policy implications, particularly given the recent tendency of employers to shift the cost of insurance premiums onto their employees