Empirical Analysis of Health Insurance Exchanges

Paper Session

Saturday, Jan. 7, 2017 10:15 AM – 12:15 PM

Hyatt Regency Chicago, Dusable
Hosted By: Econometric Society
  • Chair: Ben Handel, University of California-Berkeley

Estimating Equilibrium in Health Insurance Exchanges: Price Competition and Subsidy Design Under the ACA

Pietro Tebaldi
,
University of Chicago

Abstract

The recent US health care reform (Patient Protection and Affordable Care Act; ACA) instituted a subsidy program that provides discounts on health insurance premiums for low-income households. Any evaluation of the ACA or other related programs necessitates the estimation of consumer demand and the way subsidies affect insurers' costs and market power. To do so, I combine data from the first year of the Californian ACA exchange - where 90% of buyers receive federal subsidies - with an equilibrium model of insurance demand and imperfect competition. Taking advantage of ACA pricing restrictions and regional variation in market composition, I identify and estimate demand and cost, and then assess outcomes under the current and alternative subsidy designs. I find that, compared to a voucher program, the current design leads to a substantial increase in market power: Price increases do not translate one-for-one to premium increases, and this leads to a less elastic demand response, hence higher markups. I also show that varying subsidies by age could be an attractive possibility: increasing participation of younger individuals - estimated to be cheaper to cover and more price sensitive - reduces market power and average cost. I estimate that this implies that participation is 30% greater and per-insured public expenditure is 15% lower when compared to the current subsidy design.

Multi-Market Insurers and the ACA Exchanges: Evidence From Utah

Ben Handel
,
University of California-Berkeley
Kurt Lavetti
,
Ohio State University

Abstract

We study substitution across insurance markets, including employer provided markets, the ACA exchanges, and Medicaid, using a all-payer claims database from the state of Utah. We study the indsutrial organization implications of the ACA Exchanges coming online in this context, with implications for labor market outcomes as wel.

The Effects of the Affordable Care Act on Utilization, Quality, and Costs: Evidence From California

Mark Duggan
,
Stanford University
Atul Gupta
,
Stanford University

Abstract

The Effects of the Affordable Care Act on Utilization, Quality, and Costs: Evidence from California
Discussant(s)
Kate Ho
,
Columbia University
Neale Mahoney
,
University of Chicago
Mark Shepard
,
Harvard University
JEL Classifications
  • D0 - General