Unbiased Analysis of Today's Healthcare Issues
Adverse selection is a classic problem in health insurance. If you offer insurance to individuals, you may want to set the premiums based on the average price of the population you plan to cover. At this price, however, the sickest patients are the ones most likely to take up insurance and the health insurer’s expenses…
A paper by Hanson et al. (2023) summarizes the Congressional Budget Office’s projections around US health insurance coverage between 2023-2033. They find that low rates of uninsurance due to provisions enacted to combat COVID-19 will not be sustained as these provisions expire: Temporary policies enacted in response to the COVID-19 pandemic have increased Medicaid and…
According to a 2022 CBO report, healthcare spending per person is much higher for commercially insured individuals than those insured by Medicare and this difference is largely drive by price differentials. Why are the outstanding research questions related to the prices commercial insurers pay providers? That is the topic of a recent Health Affairs article…
For many individuals with employer-provided health insurance, a recent paper by Liu and Sydnor (2022) find that this is indeed the case. The authors use data from the 2011-2016 Kaiser Family Foundation (KFF) Employer Health Benefits Survey (EHBS). The authors examine the maximum out-of-pocket cost (including both premiums and maximum cost-sharing) as well as whether…
Getting sick creates risk over two dimensions. First, you risk getting sick which of course decreases your utility. Second, getting sick impacts you financially as (i) medical procedures are often expensive and (ii) if you can’t work due to your illness your income may fall. With respect to financial risk, health insurance may provide a…
The answer should be ‘yes’. From an economist’s perspective, prices for goods and services should generally be set at marginal cost unless there are externalities. In the case of COVID-19, there are clear externalities. By finding out that someone is COVID-19 positive, one could not only treat the patient (not an externality) but also the…
There is a large literature on this topic including fairly recent work from the Oregon Health Insurance Experiment (see Finkelstein et al. (QJE 2012), Baicker et al. AER 2014, Finkelstein et al. JPE 2019). Many of these studies look at the population level; as the majority of people are healthy, the incremental benefit for health…
According to Chambers et al. (2019), the answer varies widely depending on the health plan. The authors use a data from the Tufts Medical Center Specialty Drug Evidence and Coverage (SPEC) database. 203 specialty drugs issued by 17 of the 20 largest US commercial health plans are included in the database. This study examines nearly…
Last week I reviewed a paper the sought to understand why people don’t buy health insurance. A key finding was that there health insurance purchase was correlated with income, but not perfectly. One reason was that the cost of other goods–especially housing–affected individuals ability to purchase insurance. The paper was getting at whether health insurance…
The simple answer is, they can’t afford it. This may be a good argument for low-income individuals but for middle class and even upper middle class individuals we see people going without health insurance. The question is why. If income was the whole story, we would observe different incomes levels would have closer to 100%…