Health Insurance and Part-Time Employment: The Influence of the Affordable Care Act

• Published date: 01 January 2024
• DOI: http://doi.org/10.1177/00027162241292490
• Author: Katharine G. Abraham,Henry S. Farber
• Date: 01 January 2024
• Subject Matter: Dynamics of Poverty, Work, and Policy

144 ANNALS, AAPSS, 711, January 2024

DOI: 10.1177/00027162241292490

Health

Insurance and

Part-Time

Employment:

The Influence

of the

Affordable Care

Act

By

KATHARINE G. ABRAHAM

and

HENRY S. FARBER

1292490ANN THE ANNALS OF THE AMERICAN ACADEMYHEALTH INSURANCE AND PART-TIME EMPLOYMENT

research-article2024

Prior to the passage of the Affordable Care Act (ACA),

part-time workers were much less likely than full-time

workers to have health insurance. The ACA included

multiple provisions intended to raise health insurance

coverage rates, including a mandate that employers pro-

vide affordable coverage to full-time workers, a require-

ment that dependents be allowed to remain on their

parents’ plan until age 26, extensions of Medicaid cover-

age, and the establishment of health insurance exchanges

on which lower-income households could purchase sub-

sidized coverage. Implementation of these provisions

was associated with a decline in the full-time/part-time

coverage gap from 6.5 percentage points in 2013 to 3.1

percentage points in 2021. Increases in Medicaid cover-

age and insurance purchased on the exchanges were the

largest contributors to the reduction in the full-time/

part-time coverage gap.

Keywords: part-time employment; health insurance;

Affordable Care Act; Medicaid; depend-

ent coverage; health insurance exchanges

Part-time jobs are often regarded as “lousy

jobs.” Part-time workers earn less per hour

than full-time workers (Bardasi and Gornick

2008; Blank 1990; Manning and Petrongolo

2008) and, even when they are on a company’s

payroll rather than self-employed, are much

less likely to have access to employer-provided

Correspondence: kabraham@umd.edu

Katharine G. Abraham is Distinguished University

Professor of Economics at the University of Maryland.

She has served as commissioner of the Bureau of Labor

Statistics and as a member of the President’s Council of

Economic Advisers. She is a distinguished fellow of the

American Economic Association.

Henry S. Farber is Hughes-Rogers Professor of

Economics Emeritus at Princeton University. Farber

has served as president of the Society of Labor

Economists and received the Jacob Mincer Award for

Lifetime Contributions to the Field of Labor Economics.

He was Rebecca Blank’s dissertation advisor at the

Massachusetts Institute of Technology.

HEALTH INSURANCE AND PART-TIME EMPLOYMENT 145

benefits—most important among them, health insurance (Blank 1990; Farber

and Levy 2000; Kalleberg, Reskin, and Hudson 2000). These differences are

reduced, but not eliminated, by controlling for characteristics such as a worker’s

age, education, race, sex, and marital status. Part-time workers also typically have

fewer opportunities for career advancement (Connolly and Gregory 2008; Hoque

and Kirkpatrick 2003; Tilly 1996). For some people, such as those who have

another earner in the household or who are combining work with school, the

flexibility afforded by part-time work may make it attractive, but this is less likely

to be the case among people who rely on part-time work to make a living.

It is not entirely surprising that employers typically do not offer health insur-

ance to part-time workers. Unlike other employer-provided benefits, such as

401(k) plans, where the employer contribution is based most often on how much

the employee earns, health insurance is essentially a capitated benefit with a fixed

per-person cost.1 Part-time workers are more likely than full-time workers to

have health insurance coverage as a dependent on someone else’s employment-

related plan, to have coverage that is provided by Medicaid, or to purchase cover-

age through a private plan. The overall coverage rate for part-time workers

nonetheless historically has been significantly below that of full-time workers. We

estimate that, in 2013, 22.7 percent of part-time workers had no health insur-

ance, compared to 16.2 percent of full-time workers, a gap of 6.5 percentage

points.2

The gap in health insurance coverage rates between full-time and part-time

employees has closed significantly since the provisions of the Affordable Care Act

(ACA) of 2010 began to be implemented. In this article, we use information on

coverage by type to explore how each of the various ACA provisions related to

health insurance coverage may have affected the full-time/part-time coverage

gap. These provisions include the act’s mandate that large employers offer health

insurance to full-time workers (implemented beginning in 2015), expansion of

dependent coverage for young adults (effective in 2010), Medicaid expansion

(begun in 2014), and the establishment of exchanges through which many lower-

income households are now able to purchase private health insurance policies at

a subsidized price (introduced in 2014).

Changes in Medicaid coverage since the ACA’s passage have played the largest

role in closing the full-time/part-time coverage gap. We estimate that the share

of full-time workers covered by Medicaid grew by 2.2 percentage points between

2013 and 2021, while the share of part-time workers with Medicaid coverage

grew by 6.9 percentage points. On their own, these changes would have closed

the full-time/part-time coverage gap by 4.7 percentage points. In addition, we

estimate that insurance purchased through the ACA exchanges raised coverage

rates by 3.7 percentage points for full-time workers but double that amount for

part-time workers, thus closing the full-time/part-time gap by another 3.6

NOTE: This article was prepared for the Authors’ Conference in Memory and Honor of

Rebecca M. Blank held at the Federal Reserve Bank of Chicago, February 22–23, 2024. The

authors are grateful for research assistance from Francisca Afantchao Biakou, for helpful com-

ments on an earlier draft from David Johnson and Helen Levy, and for the suggestions made

by participants at the conference.