1,721,148 research outputs found
Replication data for: Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?
No full textAron-Dine, Aviva, Einay, Liran, Finkelstein, Amy, and Cullen, Mark, (2015) "Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?" Review of Economics and Statistics 97:4, 725-742
Replication data for: Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?
No full textAron-Dine, Aviva, Einay, Liran, Finkelstein, Amy, and Cullen, Mark, (2015) "Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?" Review of Economics and Statistics 97:4, 725-742
Bunching at the kink: Implications for spending responses to health insurance contracts
No full textA large literature in empirical public finance relies on “bunching” to identify a behavioral response to non-linear incentives and to translate this response into an economic object to be used counterfactually. We conduct this type of analysis in the context of prescription drug insurance for the elderly in Medicare Part D, where a kink in the individual's budget set generates substantial bunching in annual drug expenditure around the famous “donut hole.” We show that different alternative economic models can match the basic bunching pattern, but have very different quantitative implications for the counterfactual spending response to alternative insurance contracts. These findings illustrate the importance of modeling choices in mapping a compelling reduced form pattern into an economic object of interest. Keywords: Bunching, Medicare, Health insurance, Health careNational Institute on Aging (R01 AG032449
EZ-Tax: Tax Salience and Tax Rates
Get PDFThis paper examines whether the salience of a tax system affects equilibrium tax rates. I analyze how tolls change after toll facilities adopt electronic toll collection (ETC); drivers are substantially less aware of tolls paid electronically. I estimate that, in steady state, tolls are 20 to 40 percent higher than they would have been without ETC. Consistent with a salience-based explanation for this toll increase, I find that under ETC, driving becomes less elastic with respect to the toll and toll setting becomes less sensitive to the electoral calendar. Alternative explanations appear unlikely to be able to explain the findings
The Response of Drug Expenditure to Nonlinear Contract Design: Evidence from Medicare Part D *
No full textWe study the demand response to nonlinear price schedules using data on insurance contracts and prescription drug purchases in Medicare Part D. We exploit the kink in individuals' budgets set created by the famous "donut hole," where insurance becomes discontinuously much less generous on the margin, to provide descriptive evidence of the drug purchase response to a price increase. We then specify and estimate a simple dynamic model of drug use that allows us to quantify the spending response along the entire nonlinear budget set. We use the model for counterfactual analysis of the increase in spending from "filling" the donut hole, as will be required by 2020 under the Affordable Care Act. In our baseline model, which considers spending decisions within a single year, we estimate that filling the donut hole will increase annual drug spending by about 150 drug spending increase could be attributed to cross-year substitution, and the net increase could be as little as $45 a year.National Institute on Aging (R01 AG032449
Testing for Asymmetric Information Using “Unused Observables” in Insurance Markets: Evidence from the U.K. Annuity Market
Get PDFThis article tests for asymmetric information in the U.K. annuity market of the 1990s by trying to identify “unused observables,” attributes of individual insurance buyers that are correlated both with subsequent claims experience and with insurance demand but that insurance companies did not use to set insurance prices. Unlike the widely used positive correlation test for asymmetric information, which searches for a positive correlation between insurance demand and risk experience, the unused observables test is not confounded by heterogeneity in individual preference parameters that may affect insurance demand. We identify residential location as an unused observable in the U.K. annuity market of this period. Even though residential location was observed by all market participants, the decision not to condition prices on it created the same types of market inefficiencies that arise when annuity buyers have private information about mortality risk. Our findings raise questions about how insurance companies select the set of buyer attributes that they use in setting policy prices. In the decade following the period that we study, U.K. insurance companies changed their pricing practices and began to condition annuity prices on a buyer's postcode.National Institute on AgingNational Science Foundation (U.S.
The Effects of Medicaid Coverage — Learning from the Oregon Experiment
No full textavailable in PMC 2012 April 9.There has been much debate, especially in light of the health insurance expansions in the Affordable Care Act and the current fiscal crisis, about the costs and benefits of Medicaid. Some have argued that Medicaid doesn't deliver much in the way of real benefits, either because it pays providers so little that beneficiaries have trouble gaining access to care, or because the low-income uninsured already have reasonable access to care through clinics, uncompensated care, emergency departments, and out-of-pocket spending. Others have argued that providing Medicaid coverage to the uninsured would reduce total health care spending by improving health and reducing inefficient use of hospitals and emergency rooms. Ultimately, the costs and benefits of Medicaid are empirical questions
Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector
No full textThe conventional wisdom for the health care sector is that idiosyncratic features leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across several different conditions and performance measures that higher quality hospitals have higher market shares and grow more over time. The relationship between performance and allocation is stronger among patients who have greater scope for hospital choice, suggesting that patient demand plays an important role in allocation. Our findings suggest that health care may have more in common with "traditional" sectors subject to market forces than often assumed.National Institute on Aging (P01 AG005842)National Institute on Aging (P01 AG019783)National Institute on Aging (T32-AG000186
Selection in Insurance Markets: Theory and Empirics in Pictures
No full textGovernment intervention in insurance markets is ubiquitous and the theoretical basis for such intervention, based on classic work from the 1970s, has been the problem of adverse selection. Over the last decade, empirical work on selection in insurance markets has gained considerable momentum. This research finds that adverse selection exists in some insurance markets but not in others. And it has uncovered examples of markets that exhibit "advantageous selection"—a phenomenon not considered by the original theory, and one that has different consequences for equilibrium insurance allocation and optimal public policy than the classical case of adverse selection. Advantageous selection arises when the individuals who are willing to pay the most for insurance are those who are the most risk averse (and so have the lowest expected cost). Indeed, it is natural to think that in many instances individuals who value insurance more may also take action to lower their expected costs: drive more carefully, invest in preventive health care, and so on. Researchers have taken steps toward estimating the welfare consequences of detected selection and of potential public policy interventions. In this essay, we present a graphical framework for analyzing both theoretical and empirical work on selection in insurance markets. This graphical approach provides both a useful and intuitive depiction of the basic theory of selection and its implications for welfare and public policy, as well as a lens through which one can understand the ideas and limitations of existing empirical work on this topic
WHAT GOOD IS WEALTH WITHOUT HEALTH? THE EFFECT OF HEALTH ON THE MARGINAL UTILITY OF CONSUMPTION
No full textWe estimate how the marginal utility of consumption varies with health. To do so, we develop a simple model in which the impact of health on the marginal utility of consumption can be estimated from data on permanent income, health, and utility proxies. We estimate the model using the Health and Retirement Study's panel data on the elderly and near-elderly, and proxy for utility with measures of subjective well-being. Across a wide range of alternative specifications and assumptions, we find that the marginal utility of consumption declines as health deteriorates, and we are able to clearly reject the null of no state dependence. Our point estimates indicate that a one-standard-deviation increase in the number of chronic diseases is associated with a 10%–25% decline in the marginal utility of consumption relative to this marginal utility when the individual has no chronic diseases. We present some simple, illustrative calibration results that suggest that state dependence of the magnitude we estimate can have a substantial effect on important economic problems such as the optimal level of health insurance benefits and the optimal level of life-cycle savings.United States. Social Security Administration (National Bureau of Economic Research Grant 10-P-98363-1-05)National Institute on Aging (Grant T32-AG000186
- …
