Income Responses to the Affordable Care Act: Evidence from a Premium Tax Credit Notch.

We examine responses to the ACA subsidy for Marketplace health insurance in the first year of subsidy availability. Drawing on federal tax data and focusing on a notch in the schedule where eligibility is lost, we document that taxpayers lowered their income to remain eligible for the subsidy. The observed bunching is modest relative to the size of the notch, which, consistent with larger responses we detect in additional analyses among certain subgroups, is likely explained by significant optimization frictions. Finally, we find suggestive evidence that increased deductions drive some of the response, while reduced labor supply also plays a role.

The impact of the Affordable Care Act on self-employment.

This paper estimates the impact of the implementation of the Affordable Care Act (ACA) in 2014 on the decision to be self-employed. Using data from the Current Population Survey, we employ two identification strategies. Utilizing prereform variation in state nongroup health insurance market regulations, we find that the ACA did not increase self-employment overall in states that lacked similar provisions in their nongroup markets prior to 2014. In specifications that utilize variation across individuals in characteristics that could make it harder for them to purchase insurance if they left their current employer, we also do not find that the ACA differentially increased self-employment. However, in states that lacked the ACA nongroup market provisions, we do find a statistically significant increase in the second year of implementation (when individuals had more time to adjust behavior and the exchanges functioned properly) among individuals eligible for insurance subsidies, suggesting that a combination of time to adjust, low uncertainty and low insurance costs may be necessary for nongroup health insurance reforms to impact self-employment.

The Impact of the ACA on Premiums: Evidence from the Self-Employed.

This article examines the impact of the Affordable Care Act on premiums by studying a segment of the nongroup market, the self-employed. Because self-employed health insurance premiums are deductible, tax data contain comprehensive individual-level information on the premiums paid by this group prior to the establishment of health insurance exchanges. We compare these prior premiums to reference silver premiums available on the exchanges and find that exchange premiums are 4.2 percent higher on average among the entire sample but 42.3 percent lower on average after taxes and subsidies. We also examine which type of exchange coverage would cost less than the individual's prior health insurance premiums and find that almost 60 percent of families could purchase bronze plans for less than their prior premiums, though only about a quarter could purchase platinum plans. After taxes and subsidies, the fractions increase to over 85 percent for bronze plans and over half for platinum plans.

Did reform of the non-group health insurance market affect the decision to be self-employed? Evidence from state reforms in the 1990s.

This paper estimates whether state-level implementation of community rating and guaranteed issue regulations in the non-group health insurance market during the 1990s affected the decision of taxpayers to be self-employed. Using a panel of tax returns that span 1987-2000, we find no statistically significant effect of the reforms on the propensity to be self-employed overall, although we find evidence of an increase in self-employment among older taxpayers and weaker evidence of decreases among younger cohorts.

Do increased premium subsidies affect how much health insurance is purchased? Evidence from the self-employed.

This paper estimates the effect of recent federal and state level increases in the deductibility of health insurance premiums for self-employed individuals, which reduced the after-tax price of health insurance, on both the take-up of coverage and the amount of insurance purchased. Using a panel of tax returns filed by self-employed taxpayers from 1999 to 2004, we estimate a take-up elasticity of -0.316 overall, with significantly higher elasticities for single taxpayers. On the intensive margin, we find an elasticity of -0.733 overall.