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Empirical Analyses of Health Care Reforms

Paper Session

Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM

Pennsylvania Convention Center, 106-B
Hosted By: Econometric Society
  • Chair: Hanming Fang, University of Pennsylvania

Joint Houshold Labor Supply and Health Care Reform

Hanming Fang
,
University of Pennsylvania
Andrew Shephard
,
University of Pennsylvania

Abstract

Health insurance in the United States has traditionally been provided in form of employer spon- sored health insurance, with workers having the option to extend coverage to their spouse and de- pendents. Provisions in the Affordable Care Act significantly alter the incentive for firms to offer insurance to the spouses of employees. We extend the empirical equilibrium job search literature to an environment where multiple household members are searching for jobs. The distribution of job offers is determined endogenously, with compensation packages comprising of a wage and menu of insurance offerings (premiums and coverage) that workers select from. The model allows for a rich characterisation of the labour market, with both household and firm heterogeneity. The model is estimated using a multi-step estimation procedure, and counterfactual experiments are conducted to provide a quantitative assessment of the impact of the Affordable Care Act on firms’ insurance offerings and on household outcomes.

Insurer Structure and Efficient Health Care Provision: Evidence From Utah

Benjamin R. Handel
,
University of California-Berkeley

Abstract

We use an all-payer claims database from the state of Utah to investigate organizational efficiencies in health care production for integrated medical care delivery. With data on all individuals in the state, we use a "forced switcher" design where we investigate the many employees and consumers that were forced to switch from one type of insurance to another, either due to a job switch, employer insurance switch, or other reason. We investigate switches to and from Intermountain, a vertically integrated organization known from its efficient approach to health care delivery, as well as broad-network high-deductible plans. We investigate the impacts of these care delivery models through the final outcomes for care consumed, medical spending, and mechanisms underlying productivity.

Local Market Equilibrium and Designs of the Public Health Insurance System

Naoki Aizawa
,
University of Minnesota
Chao Fu
,
University of Wisconsin-Madison

Abstract

We study the design of public health insurance system and its equilibrium impacts on the labor market and the health insurance market. We develop an equilibrium model with rich heterogeneities across local markets, workers and firms; and estimate it exploiting variations across states and policy environments before and after the Affordable Care Act. The estimated model closely matches the distribution of insurance and employment status before and after the ACA. With the estimated model, we study the impacts of programs in the form of the newly proposed Medicaid block granting, which allows for state-specific Medicaid eligibility and coverage rules.

Lower-Quality Health Plans and Adverse Selection: A Sufficient Statistics Approach

Michael Geruso
,
University of Texas-Austin
Timothy Layton
,
Harvard University
Grace McCormack
,
Harvard University
Mark Shepard
,
Harvard University

Abstract

Adverse selection is a persistent problem in health insurance markets. In many markets, selection can occur on both the intensive margin (more vs. less generous coverage) or the extensive margin (insurance vs. uninsurance). However, modern sufficient statistics approaches to welfare analysis of adverse selection are typically only designed to capture one margin or the other. This has led to important tradeoffs between selection on the intensive and extensive margins being overlooked. In this paper, we develop a new approach to welfare analysis when consumers make both intensive and extensive margin insurance choices. We show that the welfare consequences of adverse selection and of policies intended to combat selection problems can be evaluated using a simple set of sufficient statistics that can be easily recovered given exogenous variation in plan prices. We describe our general model using a series of figures that provide intuition for the tradeoff between intensive and extensive margin selection. We then present an application of our method to the Massachusetts health insurance exchange, the Connector. Through this exercise we uncover two important interactions between the two margins of selection: (1) the presence of a low quality plan brings more consumers into the market but also causes consumers previously enrolled in high quality coverage to switch to lower quality coverage and (2) the implementation of risk adjustment transfers across plans within the market causes some consumers to enroll in higher quality overage but also causes some consumers to drop out of the market altogether. Finally, we use our sufficient statistics framework to evaluate the welfare consequences of a variety of common selection-related policies and derive optimal subsidies for the Massachusetts market.
Discussant(s)
Luca Flabbi
,
University of North Carolina-Chapel Hill
Pietro Tebaldi
,
University of Chicago
Martin Benjamin Hackmann
,
University of California-Los Angeles
Marika Ilona Cabral
,
University of Texas
JEL Classifications
  • I11 - Analysis of Health Care Markets