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Firms' Demand for Employment-Based Mental Health Benefits

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  • Judith Shinogle
  • David Salkever

Abstract

Employment-based health insurance is the main source of health coverage for the non-elderly. Few previous studies have examined the factors that impact employer decision-making in selecting the coverage to offer to their employees and none have examined generosity of mental health coverage. This paper uses cross-sectional data from a survey of medium to large firms, including information on employee characteristics, to examine the empirical determinants of mental health coverage choices. We find that the firm's demand for mental health coverage is strongly influenced by employee characteristics. We also find that certain state and local policy interventions directed at enhancing access to mental health care have impacts on coverage decisions. Specifically, public provision of mental health lowers mental health coverage generosity and parity legislation increases mental health generosity. Future research with panel data is warranted to examine the causal effects of these policies.

Suggested Citation

  • Judith Shinogle & David Salkever, 2005. "Firms' Demand for Employment-Based Mental Health Benefits," NBER Working Papers 11436, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:11436
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    References listed on IDEAS

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    1. Bryan E. Dowd & Roger Feldman, 1987. "Voluntary Reduction in Health Insurance Coverage: A Theoretical Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 13(3), pages 215-232, Jul-Sep.
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    6. Kate Bundorf, M., 2002. "Employee demand for health insurance and employer health plan choices," Journal of Health Economics, Elsevier, vol. 21(1), pages 65-88, January.
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    9. Rask, Kevin N. & Rask, Kimberly J., 2000. "Public insurance substituting for private insurance: new evidence regarding public hospitals, uncompensated care funds, and medicaid," Journal of Health Economics, Elsevier, vol. 19(1), pages 1-31, January.
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    Cited by:

    1. Cseh Attila, 2008. "Labor Market Consequences of State Mental Health Parity Mandates," Forum for Health Economics & Policy, De Gruyter, vol. 11(2), pages 1-34, April.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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