Regulation of Insurance with Adverse Selection and Switching Costs: Evidence from Medicare Part D

• 成果类型: Article
• 署名作者: Polyakova, Maria
• 署名单位: Stanford University; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20150004
• 发表日期: 2016
• 页码: 165-195
• 关键词: prescription drug insurance; state dependence; coverage gap; CHOICE; welfare; endogeneity; INFORMATION; inertia; MARKETS; models

摘要

I take advantage of regulatory and pricing dynamics in Medicare Part D to explore interactions among adverse selection, inertia, and regulation. I first document novel evidence of adverse selection and switching frictions within Part D using detailed administrative data. I then estimate a contract choice and pricing model that quantifies the importance of inertia for-risk sorting. I find that in Part D switching costs help sustain an-adversely-selected equilibrium. I also estimate that active-decision making in the existing policy environment could lead to a substantial gain in annual consumer surplus of on average $400-$600 per capita-20 percent to 30 percent of average annual spending.