Spot price biases in non-linear health insurance contracts

• 成果类型: Article
• 署名作者: Simonsen, Marianne; Skipper, Lars; Skipper, Niels; Christensen, Anne Illemann
• 署名单位: Aarhus University; University of Southern Denmark
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2021.104508
• 发表日期: 2021
• 关键词: Prescription drugs; Non-linear pricing; Intertemporal shifting

摘要

We study an apparent schism in the literature concerned with non-linear health insurance plans: con -sumers exposed to the same type of policy appear forward-looking and rational in their response to one policy feature - the end-of-year coverage reset - but not to another - that current prices depend on the year-to-date spending in a non-linear fashion. We exploit policy variation from within a unified institutional environment and uses of population-wide data. We replicate both phenomena empirically: consumers both shift the timing of their purchases in response to the end-of-year reset and react exces-sively to spot prices during the coverage year. Importantly, however, we show that also the end-of-year behavior is due to over-attention to short-run prices. Specifically, consumers respond entirely to the large and salient change in the spot price in connection with the reset of the coverage year, conditional on the true expected price change. We find that liquidity constraints, rather than plan literacy and cognitive decline are important for understanding the spot price bias. (c) 2021 Elsevier B.V. All rights reserved.