Externalities and Benefit Design in Health Insurance

• 成果类型: Article
• 署名作者: Starc, Amanda; Town, Robert J.
• 署名单位: Northwestern University; National Bureau of Economic Research; University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdz052
• 发表日期: 2020
• 页码: 2827-2858
• 关键词: medicare part d; choice inconsistencies; adverse selection; risk adjustment; advantage; care; adherence; inertia; MARKETS; demand

摘要

Insurance benefit design has important implications for consumer welfare. In this article, we model insurer behaviour in the Medicare prescription drug coverage market and show that strategic private insurer incentives impose a fiscal externality on the traditional Medicare program. We document that plans covering medical expenses have more generous drug coverage than plans that are only responsible for prescription drug spending, which translates into higher drug utilization by enrolees. The effect is driven by drugs that reduce medical expenditure and treat chronic conditions. Our equilibrium model of benefit design endogenizes plan characteristics and accounts for asymmetric information; the model estimates confirm that differential incentives to internalize medical care offsets can explain disparities across plans. Counterfactuals show that strategic insurer incentives are as important as asymmetric information in determining benefit design.