A new NBER Working Paper by Amy Finkelstein, Nathaniel Hendren, Mark Shepard
Abstract:
How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts' subsidized insurance exchange, we exploit discontinuities in the subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. As subsidies decline, insurance take-up falls rapidly, dropping about 25% for each $40 increase in monthly enrollee premiums. Marginal enrollees tend to be lower-cost, consistent with adverse selection into insurance. But across the entire distribution we can observe - approximately the bottom 70% of the willingness to pay distribution - enrollee willingness to pay is always less than half of own expected costs. As a result, we estimate that take-up will be highly incomplete even with generous subsidies: if enrollee premiums were 25% of insurers' average costs, at most half of potential enrollees would buy insurance; even premiums subsidized to 10% of average costs would still leave at least 20% uninsured. We suggest an important role for uncompensated care for the uninsured in explaining these findings and explore normative implications.
More here.
Monday, August 14, 2017
Another study on health insurance for low-income adults based on the Massachusetts health care law
-
From two graduates of the Suffolk University PhD program in Economics I had the pleasure of knowing and working with over the years. Here...
-
Stock market woes raise a nagging fear: Is a recession near?
-
https://www.aeaweb.org/articles?id=10.1257/jel.50.3.781 Mirrless Review by Mart
Indicators
Test