The Effect of Health Insurance Coverage Expansions on Auto Liability Claims and Costs

January 17, 2018

How do the Affordable Care Act health insurance coverage expansions affect payment for medical care provided through liability insurance, such as auto insurance? Theoretically, expanding coverage might lead to a substitution of health insurance disbursements for automobile insurance disbursements. Alternatively, expanding health insurance coverage might increase utilization of medical care, increasing auto liability claims payments. The net effect of these two mechanisms can only be determined empirically. We evaluate the health insurance-auto insurance interaction by examining the 2010 ACA dependent coverage expansion. Prior to 2010, individuals 19 and older were excluded from health insurance coverage under their parental health insurance plan. In September 2010, as part of the ACA, individuals were allowed to continue health insurance coverage until age 26. We use this policy change and claims data from insurers representing approximately 60% of the automobile passenger market to evaluate the effects of expanding health insurance coverage on auto liability claim payments. Using a difference-in-difference research design, we find an approximate 10% reduction in the total BI claim count in the policy-affected 19-25 ages when compared to the control group of individuals 26-34. Conditional on filing a claim, we also find an approximate 9% reduction in the mean total auto insurance paid amount in the 19-25 ages compared to the 26-34 ages. We do not identify any effects of the policy on the PIP auto insurance line.

via The Effect of Health Insurance Coverage Expansions on Auto Liability Claims and Costs by Srikanth Kadiyala, Paul Heaton :: SSRN

The Effect of the Risk Corridors Program on Marketplace Premiums and Participation

January 17, 2018

We investigate the effect of the Risk Corridors (RC) program on premiums and insurer participation in the Affordable Care Act (ACA)’s Health Insurance Marketplaces. The RC program, which was defunded ahead of coverage year 2016, and ended in 2017, is a risk sharing mechanism: it makes payments to insurers whose costs are high relative to their revenue, and collects payments from insurers whose costs are relatively low. We show theoretically that the RC program creates strong incentives to lower premiums for some insurers. Empirically, we find that insurers who claimed RC payments in 2015, before defunding, had greater premium increases in 2017, after the program ended. Insurance markets in which more insurers made RC claims experienced larger premium increases after the program ended, reflecting equilibrium effects. We do not find any evidence that insurers with larger RC claims in 2015 were less likely to participate in the ACA Marketplaces in 2016 and 2017. Overall we find that the end of the RC program significantly contributed to premium growth.

via The Effect of the Risk Corridors Program on Marketplace Premiums and Participation by Daniel Sacks, Khoa Vu, Tsan-Yao Huang, Pinar Karaca-Mandic :: SSRN

The Mortality Effects of Retirement: Evidence from Social Security Eligibility at Age 62

January 17, 2018

Social Security eligibility begins at age 62, and approximately one third of Americans immediately claim at that age. We examine whether age 62 is associated with a discontinuous change in aggregate mortality, a key measure of population health. Using mortality data that covers the entire U.S. population and includes exact dates of birth and death, we document a robust two percent increase in male mortality immediately after age 62. The change in female mortality is smaller and imprecisely estimated. Additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes.

via The Mortality Effects of Retirement: Evidence from Social Security Eligibility at Age 62 by Maria Fitzpatrick, Timothy Moore :: SSRN

New state-level estimates of the economic burden of the opioid epidemic

January 17, 2018

Opioid abuse rates and deaths vary considerably from state to state, as do the costs associated with this epidemic. But researchers have generally focused on the economic impact of the crisis in the aggregate, at the US level. In a new analysis, I estimate the cost at the state level and find substantial variation across the country. Here, I offer a preview of my findings, which will be released in full next month.

via New state-level estimates of the economic burden of the opioid epidemic – AEI

One Markup to Rule Them All: Taxation by Liquor Pricing Regulation

January 13, 2018

Government often chooses simple rules to regulate industry even when firms and consumers are heterogeneous. We evaluate the implications of this practice in the context of alcohol pricing where the regulator uses a single markup rule that does not vary across products. We estimate an equilibrium model of wholesale pricing and retail demand for horizontally differentiated spirits that allows for heterogeneity in consumer preferences based on observable demographics. We show that the single markup increases market power among upstream firms, particularly small firms whose portfolios are better positioned to take advantage of the policy. For consumers, the single markup acts as a progressive tax by overpricing products favored by the rich. It also decreases aggregate consumer welfare though 16.7% of consumers are better off under the policy. These consumers tend to be older, less wealthy or educated, and minorities. Simple policies therefore generate significant cross-subsidies and may be an effective tool for government to garner favor of key constituencies.

via One Markup to Rule Them All: Taxation by Liquor Pricing Regulation by Eugenio Miravete, Katja Seim, Jeff Thurk :: SSRN

The Persistence of Medicare Advantage Spillovers in the Post-Affordable Care Act Era

January 13, 2018

Spillovers can arise in markets with multiple purchasers relying on shared producers. If producers are constrained in their ability to adjust quality and cost across purchasers, then the influence of a dominant purchaser affects the entire market. Prior studies have found such spillovers in health care, from managed care to non-managed care populations — reducing spending, utilization, and improving outcomes. Similar effects have been identified in the Medicare Advantage market as well, with studies finding declines in utilization and reductions in resource use among the Traditional Medicare population associated with increases in county-level Medicare Advantage penetration. However, no study to date has provided plausibly causal estimates of such spillovers in the post-Affordable Care Act era. Our study does so by exploiting idiosyncratic differences in payments to Medicare Advantage plans that are unrelated to traditional Medicare spending. Further controlling for health status and other potential confounders, we estimate that a one percentage point increase in county-level Medicare Advantage penetration results in a $146 (1.7%) reduction in standardized per enrollee Traditional Medicare spending. We find evidence for reductions in utilization both on the intensive and extensive margins (including reductions in the number of inpatient stays) and across many types of health care services, not all of which have been analyzed in prior Medicare Advantage spillover studies. Our results suggest that spillovers from Medicare Advantage to Traditional Medicare have persisted in the post-Affordable Care Act era.

via The Persistence of Medicare Advantage Spillovers in the Post-Affordable Care Act Era by Yevgeniy Feyman, Austin Frakt :: SSRN

State Health Insurance Mandates and Labor Market Outcomes: New Evidence on Old Questions

January 13, 2018

We re-visit the relationship between private health insurance mandates, access to employer-sponsored health insurance, and labor market outcomes using the National Longitudinal Survey of Youth 1979. We model employer-sponsored health insurance access and labor market outcomes across the lifecycle as a function of the number of high cost mandates in place at labor market entrance. We find no evidence that high cost state health insurance mandates discourage employers from offering insurance to employees. Employers adjust wages and labor demand to offset mandate costs. Mandate effects are persistent but not permanent. We document heterogeneity across worker-types.

via State Health Insurance Mandates and Labor Market Outcomes: New Evidence on Old Questions by Yaa Akosa Antwi, Catherine Maclean :: SSRN

Ex Ante Moral Hazard in Health Insurance: Lessons from the ACA and Risky Sex

January 13, 2018

Given the $3 trillion spent on health care in 2015 and the political contention surrounding insurance expansions, the impact of health insurance on health behaviors, medical utilization, and health outcomes continues to be of the upmost importance. How insurance influences investment in good health and risky behavior (ex ante moral hazard) has received much less attention than the effect of insurance on the out-of-pocket cost of care (ex post moral hazard). Since many risky health behaviors take decades to result in illness, these behaviors likely respond to expectations about future insurance but could be unaffected by current insurance status. I examine the effect of moral hazard in the context of risky sex, a health behavior that results in quick and economically meaningful consequences – fertility and sexually transmitted infections. I isolate the effect of ex ante moral hazard by exploiting a policy in the Affordable Care Act, the 2012 zero cost-sharing for prescription contraception mandate. Leveraging pre-policy insured rates as a measure of policy intensity, I use dose-response event studies that estimate both a time-varying treatment effect as well as a one-time jump in outcomes in the treatment year. I find evidence ex ante moral hazard from health insurance decreases prevention and increases STIs. I then exploit the 2010 dependent coverage mandate to determine the overall effect of health insurance. Based on this policy I find that the protective effect of insurance on STIs more than compensates for the reduction in prevention.

via Ex Ante Moral Hazard in Health Insurance: Lessons from the ACA and Risky Sex by Barton Willage :: SSRN

The Effect of Health Insurance on Crime Evidence from the Affordable Care Act Medicaid Expansion

January 13, 2018

Little evidence exists on the Affordable Care Act (ACA) on criminal behavior, a gap in the literature that this paper seeks to address. Using a one period static model of criminal behavior, I argue we should anticipate a decrease in time devoted to criminal activities in response to the expansion, since the availability of public health insurance not only has a pure negative income effect on crime but also raises the opportunity cost of crime. This prediction is particularly relevant for the ACA expansion, because it primarily affects childless adults, the population that is most likely to engage in criminal behavior. I validate this forecast using a difference-in-differences approach, estimating the expansion’s effects on a panel dataset of state- and county-level crime rates. My point estimates show that the ACA Medicaid expansion is negatively related to burglary, motor vehicle theft, criminal homicide, robbery, and aggravated assault. The value of this Medicaid expansion induced reduction in crime to expansion states is almost $10 billion per year.

via The Effect of Health Insurance on Crime Evidence from the Affordable Care Act Medicaid Expansion by Qiwei He :: SSRN

Roe’s Unfinished Promise: Decriminalizing Abortion Once and for All

January 13, 2018

Roe’s Unfinished Promise: Decriminalizing Abortion Once and For All is the first comprehensive paper about the criminalization of non-clinical abortion in the U.S. and efforts to eliminate threats, while increasing protections, for people who end pregnancies outside the formal healthcare system. It includes a chart listing problematic laws state by state, maps highlighting the places where people who self-induce abortion are most at risk of an unjustified arrest, excerpts from relevant statutes, and case summaries. The report concludes with recommendations for efforts to liberate non-clinical abortion from the constraints of misunderstanding and the restraints of criminalization.

via Roe’s Unfinished Promise: Decriminalizing Abortion Once and for All by Farah Diaz-Tello, Melissa Mikesell, Jill Adams :: SSRN