Age-Based Heterogeneity and Pricing Regulation on the Massachusetts Health Insurance Exchange, by Keith M. Marzilli Ericson and Amanda Starc (The National Bureau of Economic Research)
Little is known about consumer behavior or insurer incentives in health insurance exchanges. We analyze choice on the Massachusetts exchange, using coarse insurer pricing strategies to identify price sensitivity. We find substantial age-based heterogeneity: younger individuals are more than twice as price sensitive as older individuals. Modified community rating regulations interact with price discrimination, as our results imply higher markups on older consumers. Age-based pricing regulations would bind even conditional on perfect risk adjustment, highlighting the importance of considering insurer incentives when regulating insurance markets. Changes in age-based pricing regulation can result in transfers of 8% of the purchase price.
Heuristics and Heterogeneity in Health Insurance Exchanges: Evidence from the Massachusetts Connector, by Keith Marzilli Ericson and Amanda Starc (American Economic Association)
We examine heuristic decision rules in consumer choice on health insurance exchanges using data from the Massachusetts Connector. Consumers may have difficulty making optimal choices in a complex environment. The heuristic “choose the cheapest plan” is suggested by the decision context, previous research, and the data: about 20% of enrollees choose the cheapest plan possible. We find evidence of this heuristic in many models, but while heuristics may play a role, preference heterogeneity is also important. Our most flexible models find an insignificant heuristic effect. In part because holding context fixed, this heuristic is observationally equivalent to extreme price sensitivity.
The Impact of the Massachusetts Health Care Reform on Health Care Use among Children, by Sarah Miller (American Economic Association)
In 2006 Massachusetts enacted a major health care reform aimed at achieving near-universal coverage in the state. While other studies have found that this reform substantially affected the use of health services in general, the impact of the reform on children is largely unexplored. Children are of special interest to policymakers because it is widely believed that better health in early childhood results in large payoffs to adult health and achievement. I analyze how the reform affected the insurance coverage, health care utilization patterns, and health outcomes of children under 18 years old.
How Did Health Care Reform in Massachusetts Impact Insurance Premiums? by John A. Graves and Jonathan Gruber (American Economic Association)
It is widely recognized that the 2006 Massachusetts health reforms served as a blueprint for national reform under the 2010 Affordable Care Act (ACA). As such, there is interest in using the Massachusetts experience to understand how insurance premiums might change under the ACA. In this paper, we analyze changes in private insurance premiums in Massachusetts between 2002 and 2010. In contrast to earlier estimates from Massachusetts (Cogan, Hubbard and Kessler 2010), we find no statistical evidence of changes in group premiums. By contrast, we find large reductions in non-group premiums in Massachusetts relative to the rest of the U.S.
What the U.S. Preventive Services Task Force Missed in Its Prostate Cancer Screening Recommendation, by William J. Catalona, Anthony V. D’Amico, William F. Fitzgibbons, Omofolasade Kosoko-Lasaki, Stephen W. Leslie, Henry T. Lynch, Judd W. Moul, Marc S. Rendell and Patrick C. Walsh (Annals of Internal Medicine)
Prostate Cancer Screening: What We Know, Don’t Know, and Believe, by Otis W. Brawley Walsh (Annals of Internal Medicine)
Screening for Prostate Cancer: U.S. Preventive Services Task Force Recommendation Statement, by Virginia A. Moyer, on behalf of the U.S. Preventive Services Task Force (Annals of Internal Medicine)
Description: Update of the 2008 U.S. Preventive Services Task Force (USPSTF) recommendation statement on screening for prostate cancer.
Methods: The USPSTF reviewed new evidence on the benefits and harms of prostate-specific antigen (PSA)–based screening for prostate cancer, as well as the benefits and harms of treatment of localized prostate cancer.
Recommendation: The USPSTF recommends against PSA-based screening for prostate cancer (grade D recommendation).
This recommendation applies to men in the general U.S. population, regardless of age. This recommendation does not include the use of the PSA test for surveillance after diagnosis or treatment of prostate cancer; the use of the PSA test for this indication is outside the scope of the USPSTF.
Evaluation of an Innovative Medicaid Health Policy Initiative to Expand Substance Abuse Treatment in Washington State, by Thomas M. Wickizer, David Mancuso and Alice Huber (Medical Care Research and Review)
State health policy making is rarely based on evidence derived from empirical analysis. An exception is an innovative policy established in 2005 in Washington State (Senate Bill [SB] 5763) to provide funding (approximately $30 million) to expand access to substance abuse (SA) treatment for Medicaid beneficiaries. The authors analyzed Medicaid claims data and other administrative data over a 7-year period, July 2001 through June 2008, for three cohorts of welfare clients (n ≈ 44,000) to assess the effect of SA treatment on health care expenditures. Regression analysis showed SA treatment to be associated (p < .001) with per member per month expenditure savings of approximately $160 to $385 depending on the welfare cohort. The aggregate annualized estimated saving ($16.8 million) equaled the cost-saving goal of SB 5763. While it may be tempting for policy makers to cut funding for SA treatment, this may be counterproductive and in the long-run increase Medicaid costs.