Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap

• 成果类型: Article
• 署名作者: Cabral, Marika; Mahoney, Neale
• 署名单位: University of Texas System; University of Texas Austin; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20160350
• 发表日期: 2019
• 页码: 37-73
• 关键词: Adverse selection; HEALTH; cost; hazard; income

摘要

Most health insurance uses cost-sharing to reduce excess utilization. Supplemental insurance can blunt the impact of this cost-sharing, increasing utilization and exerting a negative externality on the primary insurer. This paper estimates the effect of private Medigap supplemental insurance on public Medicare spending using Medigap premium discontinuities in local medical markets that span state boundaries. Using administrative data on the universe of Medicare beneficiaries, we estimate that Medigap increases an individual's Medicare spending by 22.2 percent. We calculate that a 15 percent tax on Medigap premiums generates savings of $12.9 billion annually with a standard error of $4.9 billion. (JEL G22, H24, H51, I13, J14)