Medicare Part D: Are Insurers Gaming the Low Income Subsidy Design?

• 成果类型: Article
• 署名作者: Decarolis, Francesco
• 署名单位: Boston University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20130903
• 发表日期: 2015
• 页码: 1547-1580
• 关键词: DRUG COVERAGE; procurement; auction; prices

摘要

This paper shows how in Medicare Part D insurers' gaming of the subsidy paid to low-income enrollees distorts premiums and raises the program cost. Using plan-level data from the first five years of the program, I find multiple instances of pricing strategy distortions for the largest insurers. Instrumental variable estimates indicate that the changes in a concentration index measuring the manipulability of the subsidy can explain a large share of the premium growth observed between 2006 and 2011. Removing this distortion could reduce the cost of the program without worsening consumer welfare.