Effects of Federal Policy to Insure Young Adults: Evidence from the 2010 Affordable Care Act Dependent Coverage Mandate, by Yaa Akosa Antwi, Asako S. Moriya and Kosali Simon (The National Bureau of Economic Research)
We study the impact of the recent Affordable Care Act (ACA) provision that required private health insurers to allow older child dependents to stay on parental policies until age 26 using data from the Survey of Income Program Participation (SIPP) spanning August 2008 to November 2011. By comparing outcomes for targeted young adults aged 19-25 to those who are slightly older and slightly younger, before and after the law, we find the ACA substantially reduced uninsurance among young adults. Young adults were 30 percent more likely to be on their parents’ employer policies on average after the staggered implementation commenced in September 2010, compared to before the enactment of the law. This increase in dependent coverage drew from both the uninsured and the otherwise insured. We also find evidence consistent with greater take-up among those with higher marginal benefits and lower marginal costs of obtaining dependent coverage, such as those whose parents already had family employer health insurance policies prior to the law. Dependent coverage increases are also greater for Whites relative to non-Whites, for single individuals relative to married individuals, and for non-students relative to students. We find no statistically significant difference in the impact of the provision on young adults who reside in states with and without some form of prior state dependent coverage mandate.
Affording to Wait: Medicare Initiation and the Use of Health Care by Guy David, Phil Saynisch, Victoria Acevedo-Perez and Mark D. Neuman (Health Economics)
Delays in receipt of necessary diagnostic and therapeutic medical procedures related to the timing of Medicare initiation at age 65 years have potentially broad welfare implications. We use 2005–2007 data from Florida and North Carolina to estimate the effect of initiation of Medicare benefits on healthcare utilization across procedures that differ in urgency and coverage. In particular, we study trends in the use of elective procedures covered by Medicare to treat conditions that vary in symptoms; these are compared with elective surgical procedures not eligible for Medicare reimbursement, and to a set of urgent and emergent procedures. We find large discontinuities in health services utilization at age 65 years concentrated among low-urgency, Medicare-reimbursable procedures, most pronounced among screening interventions and treatments for minimally symptomatic disease.
The Effects of Insurance Mandates on Choices and Outcomes in Infertility Treatment Markets, by Barton H. Hamilton and Brian McManus (Health Economics)
For the 10% to 15% of American married couples who experience reproductive problems, in vitro fertilization (IVF) is the leading technologically advanced treatment procedure. However, IVF’s expense may prevent many couples from receiving treatment, and those who are treated may take an overly aggressive approach to reduce the probability of failure. Aggressive treatment, which occurs through an increase in the number of embryos transferred during IVF, can lead to medically dangerous multiple births. We evaluated the principle policy proposal—insurance mandates—for improving IVF access and outcomes. We used data from US markets during 1995–2003 to show that broad insurance mandates for IVF result in not only large increases in treatment access but also significantly less aggressive treatment. More limited insurance mandates, which may apply to a subset of insurers or provide weaker guidelines for insurer behavior, generally have little effect on IVF markets.
How Price Responsive is the Demand for Specialty Care? by Matthew L. Maciejewski, Chuan-Fen Liu, Andrew L. Kavee and Maren K. Olsen (Health Economics)
Objectives. Outpatient visit co-payments have increased in recent years. We estimate the patient response to a price change for specialty care, based on a co-payment increase from $15 to $50 per visit for veterans with hypertension.
Design, Setting, and Patients. A retrospective cohort of veterans required to pay co-payments was compared with veterans exempt from co-payments whose nonequivalence was reduced via propensity score matching. Specialty care expenditures in 2000–2003 were estimated via a two-part mixed model to account for the correlation of the use and level outcomes over time, and results from this correlated two-part model were compared with an uncorrelated two-part model and a correlated random intercept two-part mixed model.
Results. A $35 specialty visit co-payment increase had no impact on the likelihood of seeking specialty care but induced lower specialty expenditures over time among users who were required to pay co-payments. The log ratio of price responsiveness (semi-elasticity) for specialty care increased from −0.25 to −0.31 after the co-payment increase. Estimates were similar across the three models.
Conclusion. A significant increase in specialty visit co-payments reduced specialty expenditures among patients obtaining medications at the Veterans Affairs medical centers. Longitudinal expenditure analysis may be improved using recent advances in two-part model methods.
The Road Ahead for the Affordable Care Act, by John E. McDonough (The New England Journal of Medicine)
The Dénouement of the Supreme Court’s ACA Drama, by Renée M. Landers (The New England Journal of Medicine)
Drug Innovations and Welfare Measures Computed from Market Demand: The Case of Anti-cholesterol Drugs, by Abe Dunn (American Economic Journal: Applied Economics)
The pharmaceutical industry is characterized as having substantial investment in R&D and a large number of new product introductions, which poses special problems for price measurement caused by the quality of drug products changing over time. This paper applies recent demand estimation techniques to individual-level data to construct a constant-quality price index for anti-cholesterol drugs. Although the average price for anti-cholesterol drugs does not change over the sample period, I find that the constant-quality price index drops by 27 percent, a pace more in line with our expectations in such a dynamic segment of the industry.