Wage Growth for the Health Care Workforce: Projecting the Affordable Care Act Impact

Abstract

Objective: To predict changes in wage growth for health care workers based on projections of insurance enrollment from the Affordable Care Act (ACA). Data Sources: Enrollment data came from three large employers and a sampling of premiums from ehealthinsurance.com. Information on state Medicaid eligibility rules and costs were from the Kaiser Family Foundation. National predictions were based on the MEPS and Medicare Current Beneficiary surveys. Bureau of Labor Statistics data were used to estimate employment. Study Design: We projected health insurance enrollment by plan type using a health plan choice model. Using claims data, we measured the services demanded for each plan choice and year. Projections of labor demand were based on current output/input ratios. Changes in wages resulting from changes in labor demand from 2014 to 2021 were based on labor supply and demand elasticities. Principal Findings: Expenditures required to retain and grow the health care workforce will increase substantially. Wages will increase most for professions with the greatest training requirements (physicians and registered nurses). The largest impact will be felt in 2015. Conclusions: Projected wage increases for health care workers may drive substantial growth in insurance premiums and reduce the affordability of health insurance.