Unbiased Analysis of Today's Healthcare Issues
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%…
According to a February 2019 report, the Council of Economic Advisors proposes to improve health insurance markets through three key policies: Eliminate the individual mandate Permitting more small businesses to form Association Health Plans Expanding short-term, limited-duration insurance (STLDI) plans The report claims that these changes will generate $450 billion in social surplus over the…
In 2010, Premera Blue Cross (Premera), a large nonprofit health plan in the Pacific Northwest implemented a value-based formulary design for its beneficiaries. In essence, enrollees could purchase high-value treatments for low copayments and low-value treatments for higher copayments. Can we use this change from more standard to value-base formulary designs to estimate the price elasticity…
Alain Einthoven is the father of managed competition. In a recent Health Affairs article, he and Laurence C. Baker look ]at managed competition in California and ask whether the standard conception of managed competition needs to be altered. Before we get to the article, we first need to ask a basic question: what is managed competition? The…
Competition matters for markets…even health care markets. A paper by Van Parys (2018) relies on a database of plan premium and market characteristics among states with federally-facilitated health insurance exchange Marketplaces. In this analysis, she finds that: In 2018, Marketplace premiums were 50 percent ($180) higher, on average, in rating areas with monopolist insurers, compared…
According to one study by Martin Anderson presented at the NBER’s Program on Health Economics meeting May 4, the answer is yes. Dr. Anderson examines the changes in insurance coverage, health care utilization, and mortality after the expansion of Medicare coverage to all patients with end stage renal disease (ESRD). The study finds that: …the expansions…
In econ-speak, we are looking to measure the elasticity of plan switching with respect to premium increases. This elasticity is in essence how much would a 10% change in premium affect the likelihood of plan choice change. If the answer is 10%, the elasticity is -1. If the answer is a 5% increase in plan…
When you buy a typical product, the vendor does its best to make the purchasing process as easy as possible. There is a reason for this, clearly; they want your business. State and federal governments, however, have no such incentive. In fact, oftentimes reducing the number of people using government services saves money. Thus, it…
The Affordable Care Act (ACA) aimed to increase health insurance coverage largely through two pathways: (i) raising the income limits for individuals to qualify for Medicaid, (ii) creating new health insurance exchanges and health insurance subsidies to encourage the purchase of private health insurance among individuals that were not eligible for Medicaid. Other provisions, such…