Health Reform and Health Insurance Coverage of Early Retirees by Helen Levy, Tom Buchmueller, Sayeh Nikpay :: SSRN

December 6, 2016

This paper presents evidence of the dynamics of health insurance coverage between 2008 and 2014 among early retirees, defined as individuals ages 55 to 64 who are not in the labor force. We focus on three questions. First, how did insurance coverage change among early retirees in 2014, when the new ACA options became available, compared with trends in coverage from 2008 to 2013? Second, are there differences between states that did and did not implement the ACA’s Medicaid expansion in January 2014? Third, how did the income gradient in insurance coverage for early retirees change in 2014, both overall and in states with or without Medicaid expansion? We find that between 2013 and 2014, the fraction of early retirees without health insurance declined significantly from 14.7 percent to 11.2 percent, reversing a trend toward increasing uninsurance in recent years. This change was driven by increases in both Medicaid and private non-group coverage. Gains in coverage were larger in states that implemented the Affordable Care Act’s Medicaid expansion in January 2014 than in states that did not. The gains in coverage disproportionately benefited low-income early retirees, and therefore reduced the gradient in coverage with respect to income. There is no evidence of an acceleration of the decline in employer-sponsored coverage for early retirees, either overall or in states that expanded Medicaid. These results suggest that the major coverage provisions of the ACA have increased coverage among early retirees, with particularly large gains among those with very low income in states that expanded Medicaid.

Source: Health Reform and Health Insurance Coverage of Early Retirees by Helen Levy, Tom Buchmueller, Sayeh Nikpay :: SSRN


Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges by Michael Geruso, Timothy J. Layton, Daniel Prinz :: SSRN

December 1, 2016

By steering patients to cost-effective substitutes, the tiered design of prescription drug formularies can improve the efficiency of healthcare consumption in the presence of moral hazard. However, a long theoretical literature describes how contract design can also be used to screen consumers by profitability. In this paper, we study this type of screening in the ACA Health Insurance Exchanges. We first show that despite large regulatory transfers that neutralize selection incentives for most consumer types, some consumers are unprofitable in a way that is predictable by their prescription drug demand. Then, using a difference-in-differences strategy that compares Exchange formularies where these selection incentives exist to employer plan formularies where they do not, we show that Exchange insurers design formularies as screening devices that are differentially unattractive to unprofitable consumer types. This results in inefficiently low levels of coverage for the corresponding drugs in equilibrium. Although this type of contract distortion has been highlighted in the prior theoretical literature, until now empirical evidence has been rare. The impact on out-of-pocket costs for consumers affected by the distortion is substantial — potentially thousands of dollars per year — and the distortion creates an equilibrium in which contracts that efficiently trade off moral hazard and risk protection cannot exist.

Source: Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges by Michael Geruso, Timothy J. Layton, Daniel Prinz :: SSRN


Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here

November 25, 2016

The state’s most recent enrollment reports show more than 650,000 able-bodied adults have enrolled in Medicaid since the Obamacare expansion, and this enrollment shows no sign of slowing down. This is nearly twice as many adults as the state said would ever enroll and more than the state said would ever even be eligible.

Expansion costs are also significantly over projections. Despite promises from the administration of former Gov. Pat Quinn that total expansion costs would “only” hit $2.7 billion in the first two years, costs actually came in at $4.7 billion – 70 percent higher than promised.

Source: Hundreds on Medicaid waiting list in Illinois die while waiting for care | Illinois Policy | Illinois’ comeback story starts here


Caught in the Gap Between Status and No-Status: Lawful Presence Then and Now by Sara N. Kominers :: SSRN

November 24, 2016

Where the line is drawn between noncitizens who are incorporated into American society and those who are not has changed greatly over time, resulting in the creation of a gray area where certain immigrants fall between those with lawful immigration status and those with no status at all. These individuals are granted “lawful presence” which permits them to remain and work in the United States, but does not provide them with a path to citizenship. The number of people in this ambiguous category continues to grow and may dramatically expand again soon as President Obama recently exerted broad scale executive action in response to Congress’ refusal to reform immigration laws.

This article looks at the ways immigration law grants lawful presence and the changing responses of the legal system in dealing with this “gap” between status and no-status. The recent exclusion of Deferred Action for Childhood Arrivals from the Affordable Care Act and other essential health insurance programs serves as a case study to demonstrate how inconsistently laws handle this middle category of people today. The consequences of such a narrow division between who receives benefits and who does not is that the gap between status and no-status widens, encouraging state lawmakers to further discriminate against this group. I argue that the struggle over where the line should be drawn to decide which noncitizens should and should not have access to essential rights and benefits is exacerbated by the tension between a progressive President and a conservative Congress. In a system where the Executive branch may confer lawful presence but only Congress can confer lawful status, hundreds of thousands of people are caught in the gap. I conclude by arguing that as the number of people in this gray area continues to grow, courts should lean toward inclusion rather than exclusion of lawfully present noncitizens in resolving this tension in the law.

Source: Caught in the Gap Between Status and No-Status: Lawful Presence Then and Now by Sara N. Kominers :: SSRN


A Closer Look at Health Insurance Coverage Estimates – AEI

November 16, 2016

The main objective of the Affordable Care Act (ACA) was to increase enrollment in health insurance among those who were previously uninsured. Official estimates from the Census Bureau have consistently overstated the number of people who are uninsured. A major factor in the overestimate is the undercount of people in Medicaid. Also, millions of Americans have been officially uninsured despite their eligibility for public insurance or employer coverage. With the passage of the ACA, fewer than 10 percent of the remaining uninsured do not have a realistic path to securing health insurance. The future of the ACA is now uncertain, but any future policy changes will likely need to provide a sure path to insurance coverage for all Americans as well.

Source: A Closer Look at Health Insurance Coverage Estimates – AEI


Politics Aside, We Know How to Fix Obamacare – The New York Times

November 14, 2016

The number of insurers participating in the Obamacare marketplaces is falling. This year, 182 counties had only one insurer offering plans. Next year, that will be true of nearly 1,000 counties, or almost one-third of the total. An average marketplace will offer 17 fewer plans in this fall’s open-enrollment period than last year’s. Fewer choices make it harder for consumers to find plans that meet their needs, like including doctors and hospitals they prefer and covering the drugs they take.

Source: Politics Aside, We Know How to Fix Obamacare – The New York Times


Policy Choice and Product Bundling in a Complicated Health Insurance Market: Do People Get It Right? by Nathan Kettlewell :: SSRN

November 10, 2016

This paper evaluates health insurance policy selection and how this interacts with product bundling by using a discrete choice experiment closely calibrated to the Australian private health insurance market. The experimental approach overcomes some limitations of revealed preference research in this area. The results indicate that consumers are likely to make choices that violate expected utility theory, use heuristic decision strategies, and over-insure relative to minimising out-of-pocket costs. Decision quality is significantly lower when choosing a bundled hospital/ancillaries health insurance policy (compared to stand-alone ancillaries cover), which is the policy type most consumers purchase in Australia.

Source: Policy Choice and Product Bundling in a Complicated Health Insurance Market: Do People Get It Right? by Nathan Kettlewell :: SSRN