Jacob Hacker writes that there’s “a simple fix for Obamacare’s current woes” — the public option. That’s the public insurer that President Obama was talking about in his Florida speech. As I’ve noted, a public option doesn’t fix any of the problems we have, and it would be hard as heck to set up. If you construct it along the lines that it was originally envisioned (which is to say, a self-funding and market-competitive insurer), it will have the same problems as other insurers, while addressing none of the woes in the market for individual insurance. If you allow it to run at a loss, it’s essentially an enormous, open-ended subsidy that would be politically unpopular and fiscally reckless. And if you don’t subsidize it, but do give it the ability to slap price controls on providers, you will face a political rebellion from a very active and influential group of voters.
Calorie Overestimation Bias and Fast Food Products: The Effects of Calorie Labels on Perceived Healthiness and Intent to Purchase by Simon Hedlin :: SSRNOctober 29, 2016
In 2014, the United States Food and Drug Administration announced that chain restaurants with 20 or more locations would be required to put calorie labels on the menu. The merits of the policy depend in large part on three empirical issues: 1) if calorie labels help correct calorie under- or overestimation biases; 2) if the labels lead to changes in consumer behavior, which may improve physical health; and 3) if they have an impact on psychological health. This paper presents data from an online experiment (N = 1,323) in which participants were randomly presented with pictures of food and drink items from major fast-food companies either with or without calorie labels. The following findings are reported. First, there was calorie overestimation bias among participants, and the respondents thought, on average, that products contained more calories than was actually the case. Second, calorie labels both made participants perceive the products as healthier, and made them more likely to intend to purchase said items. Third, calorie labels did not have any discernible effects either on the expected utility from consuming the products, or on the participants’ experienced well-being. Thus, while calorie labels did not appear to have any negative effects on psychological health, they did seem to correct a calorie overestimation bias, which may inadvertently improve the perceived healthiness of foods and beverages high in calories, and could also potentially lead consumers to buy more, rather than fewer, such products.
Estimating the Heterogeneous Welfare Effects of Choice Architecture: An Application to the Medicare Prescription Drug Insurance Market by Jonathan Ketcham, Nicolai Kuminoff, Christopher A. Powers :: SSRNOctober 29, 2016
We develop a structural model for bounding welfare effects of policies that alter the design of differentiated product markets when some consumers may be misinformed about product characteristics and inertia in consumer behavior reflects a mixture of latent preferences, information costs, switching costs and psychological biases. We use the model to analyze three proposals to redesign markets for Medicare prescription drug insurance: (1) reducing the number of plans, (2) providing personalized information, and (3) defaulting consumers to cheap plans. First we combine administrative and survey data to determine which consumers make informed enrollment decisions. Then we analyze the welfare effects of each proposal, using revealed preferences of informed consumers to proxy for concealed preferences of misinformed consumers. Results suggest that each policy produces large gains and losses for some consumers, but the menu reduction would unambiguously harm most consumers whereas personalized information would unambiguously benefit most consumers.
Source: Estimating the Heterogeneous Welfare Effects of Choice Architecture: An Application to the Medicare Prescription Drug Insurance Market by Jonathan Ketcham, Nicolai Kuminoff, Christopher A. Powers :: SSRN
The Contraceptive-Coverage Cases and Politicized Free-Exercise Lawsuits by Gregory M. Lipper :: SSRNOctober 29, 2016
The latest lawsuits challenging the Affordable Care Act’s contraceptive-coverage regulations illustrate the transformation of free-exercise lawsuits — including those brought under the federal Religious Freedom Restoration Act — into potent political tools. Current free-exercise doctrine and practice inadequately address organized campaigns of free-exercise litigation seemingly motivated by political ideology rather than sincere religious belief. This Article examines the political, ideological, and religious forces that have culminated into the political and legal opposition to the ACA’s contraceptive-coverage regulations, identifying anomalies in the resulting legal challenges from for-profit corporations and non-profit organizations along the way.
After describing the harms caused by politicized free-exercise lawsuits turning on insincere claims of religious burden, the Article offers initial proposals to both courts and governmental litigants to combat the transformation of free-exercise lawsuits into weapons of political warfare. In particular, courts and governmental litigants should adopt a more flexible approach that acknowledges the practical realities of modern religious-liberty cases, involves more frequent and sustained challenges to plaintiffs’ sincerity when appropriate, and gives the government leeway to reach compromises with religious objectors without undermining the government’s ability to defend other cases. On the other hand, failure to police insincere free-exercise claims will continue to cause mainstream support for genuine free-exercise claims and religious accommodations to dwindle.
Competition in the Healthcare Sector in Singapore – An Explorative Case Study by Andrea K. Gideon :: SSRNOctober 29, 2016
Market mechanisms have increasingly been introduced into the public service regimes of many countries over recent decades. This was meant to foster competition and choice which in turn was thought to increase quality while decreasing prices. Such progressive liberalisation led to public services increasingly falling within the ambit of competition laws which in turn partly required further liberalisation in some competition law regimes. However, there are certain tensions between providing such services in a competitive market and, at the same time, allowing them to retain their public interest character including such elements as universal provision, trust based relationships or equality of access. The ASEAN countries, in which competition law is still a relatively new area of law, might face such tensions with increasing application of competition law to these areas. Yet, the application of competition law to public services in ASEAN countries has thus far received virtually no attention.
The explorative case study ‘Competition in the healthcare sector in Singapore’ aims to make a first step in filling this gap in the research by exploring the healthcare sector in Singapore from a competition law perspective. It will leave to one side questions on medical research, pharma firms’ interaction with the market and primary care. Instead it focuses its analysis on hospital care; more specifically on in-patient care (i.e. mainly secondary care). The research will explore in how far the notion of undertaking is applicable to hospital in-patient services in Singapore. Since the notion of undertaking in Singaporean competition law has received hardly any attention so far this is of relevance beyond the case study. It will then proceed to analyse in how far there might be potential issues with competition law application (s 34, 47 and 54 of the Competition Act) and if there would be recommendations beyond the legal analysis.
The Difference a Whole Woman Makes: Protection for the Abortion Right After Whole Woman’s Health by Linda Greenhouse, Reva Siegel :: SSRNOctober 29, 2016
In this essay we consider the implications of Whole Woman’s Health v. Hellerstedt for the future of abortion regulation. We draw on our recent article on health-justified abortion restrictions — Casey and the Clinic Closings: When “Protecting Health” Obstructs Choice, 125 Yale L.J. 1428 (2016) — to describe the social movement strategy and the lower court rulings that led to the Supreme Court’s decision. We show that in Whole Woman’s Health the Court applies the undue burden framework of Planned Parenthood v. Casey in ways that have the potential to reshape the abortion conflict.
In Whole Woman’s Health, the Court insisted on an evidentiary basis for a state’s claim to restrict abortion in the interests of protecting women’s health. The Court required judges to balance the demonstrated benefit of the law against the burden that a shrunken abortion infrastructure will have on the ability of women to exercise their constitutional rights. A crucial aspect of the Court’s decision in Whole Woman’s Health is the guidance it provides judges in determining the burdens and benefits to balance in the Casey framework. Particularly notable, even unexpected, is the Court’s capacious understanding of “burden” as the cumulative impact of abortion regulation on women’s experience of exercising their constitutional rights. By clarifying what counts as a burden and what counts as a benefit to be balanced within the Casey framework, the decision constrains regulations explicitly aimed at protecting fetal life as well as those ostensibly intended to protect women’s health. In these and other ways, Whole Woman’s Health robustly reaffirms judicial protection for the abortion right.
Cost-Sharing and Drug Pricing Strategies: Introducing Tiered Co-Payments in Reference Price Markets by Annika Herr, Moritz Suppliet :: SSRNOctober 29, 2016
Health insurances curb price insensitive behavior and moral hazard of insureds through different types of cost-sharing, such as tiered co-payments or reference pricing. This paper evaluates the effect of newly introduced price limits below which drugs are exempt from co-payments on the pricing strategies of drug manufacturers in reference price markets. We exploit quarterly data on all prescription drugs under reference pricing available in Germany from 2007 to 2010. To identify causal effects, we use instruments that proxy regulation intensity. A difference in differences approach exploits the fact that the exemption policy was introduced successively during this period. Our main results first show that the new policy led generic firms to decrease prices by 5 percent on average, while brand-name firms increase prices by 7 percent after the introduction. Second, sales increased for exempt products. Third, we find evidence that differentiated health insurance coverage (public versus private) explains the identified market segmentation.