In the academic literature, the decade of the 1990s is considered a period of declining EBHI coverage, though not necessarily because of a drop in access rates.
12) They estimated that EBHI coverage declined from 57 percent in 2000 to 54 percent in 2008, but because of different proximate causes than in the 1990s.
For examples of analyses of the expected impact of the act on EBHI, see Kosali Simon, Implications of health reform for employers: an analysis of the Patient Protection and Affordable Care Act (Washington, DC: Center for American Progress, May 2010); and Linda Blumberg, Matthew Buettgens, Judy Feder, and John Holahan, "Why employers will continue to provide health insurance: the impact of the Affordable Care Act," Timely analysis of immediate health policy issues (Washington, DC: Urban Institute, October 2011).
First, it is clear that EBHI imposes a distortionary employment tax on producers.
Like EBHI, the benefits from government-provided health insurance enter the agents' utility function through x.
Since one of the main purposes of the paper is to measure the distortionary effects of EBHI, we estimate an alternative model where the firm's EBHI costs are instead replaced by a lump-sum tax, T, paid to the government.
While the lump-sum model allows us to measure the size of the distortion effects that result from EBHI, it does not represent an administratively feasible policy alternative.
Based on the results from this model, we can directly measure the size of the distortion caused by EBHI.
Thus, the distortion caused by the existing EBHI system costs the U.
As was the case under lump-sum financing, there is an increase in employment and a decrease in hours worked across all workers as compared to the benchmark EBHI model.