The impact of consumer inattention on insurer pricing in the Medicare Part D program

• 成果类型: Article
• 署名作者: Ho, Kate; Hogan, Joseph; Morton, Fiona Scott
• 署名单位: Columbia University; National Bureau of Economic Research; Yale University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12207
• 发表日期: 2017
• 页码: 877-905
• 关键词: switching costs; adverse selection; insurance markets; health-insurance; state dependence; CHOICE; search; COMPETITION; prices

摘要

The Medicare Part D program relies on consumer choice to provide insurers with incentives to offer low-priced, high-quality pharmaceutical insurance plans. We demonstrate that consumers switch plans infrequently and search imperfectly. We estimate a model of consumer plan choice with inattentive consumers and show that high observed premiums are consistent with insurers profiting from consumer inertia. We estimate the reduction in steady state plan premiums if all consumers were attentive. An average consumer could save $1050 over three years; government savings in the same period could amount to $1.3 billion or 1% of the cost of subsidizing the relevant enrollees.