Can Health Insurance Competition Work? Evidence from Medicare Advantage

AbstractBehavioural economic research has established that defaults, one form of nudge, powerfully influence choices. In most policy contexts, all individuals receive the same nudge. We present a model that analyses the optimal universal nudge for a situation in which individuals differ in their preferences and hence should make different choices and may incur a cost for resisting a nudge. Our empirical focus is onterminated choosers(TCs), individuals whose prior choices become no longer available. Specifically, we examine the power of defaults on individuals who had enrolled in Medicare Advantage plans with drug coverage and whose plans were then discontinued. Currently, if these TCs fail to actively choose another Medicare Advantage plan, they are defaulted into traditional fee-for-service Medicare (TM) without drug coverage. Overall, the rate of transition of TCs into TM is low, implying that original preferences and status quo bias overpower the default. Increasing numbers of Americans are choosing plans in health insurance exchange settings such as Medicare, the Affordable Care Act and private exchanges. Plan exits and large numbers of TCs are inevitable, along with other forms of turmoil. Any guidance and defaults provided for TCs should factor in their past revealed preferences.

Download Full-text

Do Larger Health Insurance Subsidies Benefit Patients or Producers? Evidence from Medicare Advantage

10.3386/w20470 ◽

2014 ◽

Cited By ~ 2

Author(s):

Marika Cabral ◽

Michael Geruso ◽

Neale Mahoney

Keyword(s):

Health Insurance ◽

Medicare Advantage

Download Full-text

Prices for Physicians’ Services in Medicare Advantage and Commercial Plans

Medical Care Research and Review ◽

10.1177/1077558718780604 ◽

2018 ◽

Vol 77 (3) ◽

pp. 236-248 ◽

Cited By ~ 1

Author(s):

Daria M. Pelech

Keyword(s):

Health Insurance ◽

Claims Data ◽

Fee For Service ◽

Medicare Advantage ◽

Physician Services ◽

Insurance Premiums ◽

Health Insurance Premiums

The prices that insurers pay physicians ultimately affect beneficiaries’ health insurance premiums. Using 2014 claims data from three major insurers, we analyzed the prices insurers paid in their Medicare Advantage (MA) and commercial plans for 20 physician services, in and out of network, and compared those prices with estimated amounts that Medicare’s fee-for-service (FFS) program would pay for the same service. MA prices paid by those insurers were close to Medicare FFS prices, varied minimally, and were similar in and out of network. In contrast, commercial prices paid by the same insurers were substantially higher than FFS, varied widely, and were up to three times higher out of network than in network. Those results suggest that insurers can use statutory limits on out-of-network charges in MA to negotiate lower in-network prices in those plans. In contrast, without those limits on out-of-network prices, in-network prices in commercial plans are much higher.

Download Full-text

Does Privatized Health Insurance Benefit Patients or Producers? Evidence from Medicare Advantage

SSRN Electronic Journal ◽

10.2139/ssrn.2489999 ◽

2014 ◽

Cited By ~ 16

Author(s):

Marika Cabral ◽

Michael Geruso ◽

Neale Mahoney

Keyword(s):

Health Insurance ◽

Medicare Advantage ◽

Insurance Benefit

Download Full-text

Commentary: Don’t Further Privatize Medicare

INQUIRY The Journal of Health Care Organization Provision and Financing ◽

10.1177/0046958019867612 ◽

2019 ◽

Vol 56 ◽

pp. 004695801986761

Author(s):

David A. Lipschutz

Keyword(s):

Health Insurance ◽

Lower Cost ◽

Insurance Coverage ◽

Health Insurance Coverage ◽

Medicare Advantage ◽

Medicare Program

The Medicare program is quietly becoming privatized through increasing enrollment in Medicare Advantage (MA) plans, even though MA has not lived up to its promise of delivering better care at lower cost. Policymakers must reverse this trend and ensure parity between traditional Medicare and MA rather than encourage it through legislation that only benefits MA. Furthermore, as discussions of expanding health insurance coverage through Medicare intensify, policymakers should explore what version of Medicare they wish to expand.

Download Full-text