Data and Methods for Constructing Synthetic Firms in CBO's Health Insurance Simulation Model, HISIM2

December 2, 2021

Presentation to the

International Microsimulation Association

Ben Hopkins

Health Analysis Division

For information about the conference, see https://tinyurl.com/2p8ekuvz(PDF, 663 KB).

The U.S. Congressional Budget Office (CBO) produces independent analyses of budgetary and economic issues to support the Congressional budget process.

CBO uses a health insurance microsimulation model, HISIM2, to generate estimates of coverage, premiums, and budgetary costs for the nonelderly.

For more information on HISIM2, see Congressional Budget Office, HISIM2: The Health Insurance Simulation Model Used in Preparing CBO's July 2021 Baseline Budget Projections

(July 2021),https://www.cbo.gov/publication/57205.

1

HISIM2 models household decisions between different sources of health insurance coverage and employer decisions to offer health insurance or not.

The model of whether employers offer their employees health insurance has a large effect on CBO's coverage and budgetary projections.

2

Insurance Coverage of People Under Age 65, 2017

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Uninsured

Other

Nongroup Insurance

Medicaid, the Children's

Health Insurance Program

(CHIP), and Medicare

People with access to employment-based insurance usually enroll in it; others are more likely to be uninsured.

Employment-Based

Insurance (ESI)

No access to employment-based

Access to employment-based

insurance

insurance

Based on the microsimulation model underlying CBO's 2021 baseline. See Jessica Banthin and others, Sources and Preparation of Data Used in HISIM2-CBO'sHealth Insurance

Simulation Model, Working Paper 2019-04 (Congressional Budget Office, April 2019), www.cbo.gov/publication/55087.

3

In theory, an individual worker's access to employment-based insurance (ESI) depends on how much the person and his or her coworkers cost to insure and how much they demand insurance.

Employers offer health insurance to attract workers who demand it. That demand depends on the net premium, attractiveness, and availability of employment-based insurance relative to alternate health insurance options that the workers might choose.

In firms with more than 50 workers, gross premiums depend upon the collective health care spending for workers.

4

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CBO - Congressional Budget Office published this content on 02 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 December 2021 16:00:09 UTC.