We used the parameter estimates from the fully specified logistic
regression to simulate coverage levels under alternative assumptions
about the future paths of expenditure and income. Each simulation
used the sample of workers from the 1996 CPS who were not
covered by a public program or as a dependent and trended income
and expenditures forward at specified rates.We assumed a 2.7 percent
per year nominal growth rate for income, reflecting the assumption
in the 1997 Economic Report to the President that the Consumer
Price Index (CPI) will grow at 2.7 percent per year from1997 to 2005
and that there will be minimal growth in real wages. We simulated
the effects of growth rates in health spending per capita for insured
workers of zero, 3.5 percent, 5.5 percent, and 7.5 percent per year. In
each simulation the population of workers remained static, as represented
by the 1996 CPS sample. The simulations did not capture
changes in the labor force that will occur as the population ages, as
people enter (or leave) the labor force, or as a result of immigration.