2014
DOI: 10.1016/j.jhealeco.2014.01.009
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Assessing incentives for service-level selection in private health insurance exchanges

Abstract: Even with open enrollment and mandated purchase, incentives created by adverse selection may undermine the efficiency of service offerings by plans in the new health insurance Exchanges created by the Affordable Care Act. Using data on persons likely to participate in Exchanges drawn from five waves of the Medical Expenditure Panel Survey, we measure plan incentives in two ways. First, we construct predictive ratios, improving on current methods by taking into account the role of premiums in financing plans. S… Show more

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Cited by 66 publications
(70 citation statements)
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“…Several European countries such as the Netherlands, Belgium, Switzerland, Germany as well as Israel have implemented risk adjustment schemes (Chernichovsky and van de Ven, 2003;van de Ven et al, 2007;Shmueli, 2015). In the US, the risk adjustment in Medicare Part C-the privatized version of the public health insurance program for the elderly and disabled-has already been a talking point for two decades (Newhouse et al, 1997;Glazer and McGuire, 2000;McGuire, 2007;McGuire et al, 2014;Brown et al, 2014;Cabral et al, 2014;Duggan et al, 2016). In a paper that is similar in spirit to ours, Cabral et al (2014) study the effect of increases in capitated payments to insurers in Medicare Part C. They find that insurers reduce premiums by 45 cents for every additional dollar they receive (in addition to an increase in the actuarial value by 8 cents).…”
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confidence: 99%
“…Several European countries such as the Netherlands, Belgium, Switzerland, Germany as well as Israel have implemented risk adjustment schemes (Chernichovsky and van de Ven, 2003;van de Ven et al, 2007;Shmueli, 2015). In the US, the risk adjustment in Medicare Part C-the privatized version of the public health insurance program for the elderly and disabled-has already been a talking point for two decades (Newhouse et al, 1997;Glazer and McGuire, 2000;McGuire, 2007;McGuire et al, 2014;Brown et al, 2014;Cabral et al, 2014;Duggan et al, 2016). In a paper that is similar in spirit to ours, Cabral et al (2014) study the effect of increases in capitated payments to insurers in Medicare Part C. They find that insurers reduce premiums by 45 cents for every additional dollar they receive (in addition to an increase in the actuarial value by 8 cents).…”
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confidence: 99%
“…Simulating payments recognizing these plan payment features can be used in calculating predictive ratios or over/undercompensation [16,32]. plan payment: individual and group R-squared measures are obviously based on squared deviations 19 and in welfare economics, the efficiency loss associated with a price distortion (such as a tax) is proportional to the square of the distortion. In our empirical analyses, we apply several variants of this weighting function with powers ranging from 1 to 2.…”
Section: A Summary Measure Of Selection Incentivesmentioning
confidence: 99%
“…Our sample differs from that used in Kautter et al (2014) 26 This first model corresponds to R i from (1).…”
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confidence: 99%
“…One way to do this would be to literally pull out costs 23 We select this subset from MarketScan using methods from earlier work using the Medical Expenditure Panel Survey (MEPS) to define persons with the characteristics that would make them eligible for the Marketplace (McGuire et al, , 2014, and propensity model methods within MEPS using variables common to MEPS and MarketScan (Rose et al, forthcoming). In essence we estimate the propensity an observation in MEPS is Marketplace eligible (in relation to large group health insurance) and then use this propensity score, along with nationally representative population weights from MEPS to draw a sample from MarketScan.…”
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confidence: 99%
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