In the model, each individual possesses health capital and its dynamics is affected by health care choice.
Each employer makes a decision to offer health insurance by aggregating preference of employees.
The ACA also aims to prevent insurers from making unreasonable rate increases.
Insurance coverage isn’t free by any means, but people now have a wider range of coverage options.
I also investigate whether there exists a welfare enhancing alternative system.
I develop an equilibrium life-cycle labor search model, where worker’s health care choice and employer’s health insurance provision are endogenously determined, that can match the most salient features of the labor market and health care in the data.
However, such an effect depends on how the premium in insurance exchange will be in equilibrium and employer’s endogenous response with respect to health insurance provision.
The model developed here captures these equilibrium effects and helps us to understand the effect of the ACA to older workers.
The ACA was also designed to protect consumers from insurance company tactics that might drive up patient costs or restrict care.
Millions of Americans have benefitted by receiving insurance coverage through the ACA.