The Incidence of Mandated Health Insurance: Evidence from the Affordable Care Act Dependent Care Mandate
The dependent care mandate is one of the most popular provisions of the 2010 Affordable Care Act (ACA). This provision requires that employer-based insurance plans cover health care expenditures for workers with children 26 years old or younger. While there has been considerable scholarly and policy interest in the effects of this mandate on health insurance coverage among young adults, there has been little scholarly work measuring the costs and incidence of this mandate and who pays the costs of it. In our empirical work, we exploit the fact that some states had dependent care mandates in years prior to the passage of the ACA. Using data from the Survey of Income and Program Participation (SIPP), we find that workers at firms with employer-based coverage – whether or not they have dependent children – experience an annual reduction in wages of approximately $1,200. Our results imply that the marginal costs of mandated employer-based coverage expansions are not entirely borne only by the people whose coverage is expanded by the mandate.
The authors thank Kate Bundorf, Thomas Deleire, Jeremy Goldhaber-Fiebert, and Joanna Lahey and seminar participants at Stanford’s Summer Honors College for helpful conversations and comments. We also thank Lena Schoemaker for outstanding research assistance. Dr. Bhattacharya is grateful for support for his work on this paper from the National Institute on Aging (R37AG036791, P30AG17253, and P01AG005842). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.