Health insurance coverage of the unemployed: COBRA and the potential effects of Kassebaum-Kennedy

We use the April 1993 Current Population Survey to examine the health insur ance coverage decisions of the unemployed and to simulate the potential eff ects of the new Kassebaum-Kennedy legislation. After controlling for demogr aphic characteristics, COBRA eligibility mises the probability of health in surance coverage by 0.095, while eligibility for spouse employer insurance increases the likelihood of coverage by 0.318, and eligibility for both inc reases the likelihood of coverage by 0.341. In our Simulations, we find tha t had Kassebaum-Kennedy been in effect in April 1993, 9.0 percent of the un employed would be eligible to take tip coverage, and the coverage rate of t he unemployed would have been increased by 0.85 percent to 1.5 percent from 41.6 percent. Our estimates of the effect of Kassebaum-Kennedy on health i nsurance coverage ave much lower than those reported by the Government Acco unting Office prior to the passage of the legislation. (C) 1999 by the Asso ciation for Public Policy Analysis and Management.