Plan Benefits
Health Insurance for Whom? The 'Spill-up' Effects of Children’s Health Insurance on Mothers
Daniel Grossman, Sebastian Tello-Trillo & Barton Willage
NBER Working Paper, January 2022
Abstract:
A rich literature documents the benefits of social safety net programs for children. This paper focuses on an unexplored margin: how children’s programs impact parents’ well-being. We explore changes in children’s public health insurance and its effects on parents’ economic and behavioral outcomes. Using a simulated eligibility for Medicaid eligibility expansions in the 1980s and 1990s, we isolate variation in children’s Medicaid eligibility due to changes in government policies. We find that increases in children’s Medicaid eligibility increases the likelihood a mother is married, decreases her labor market participation, and reduces her smoking and alcohol consumption. Our findings suggest improved maternal well-being as measured by the Center for Epidemiological Studies-Depression score, a proxy for mental health. These results uncover a new link that provides an important mechanism, parental well-being, for interpreting the literature’s findings on the long-term, short-term, and intergenerational effects of Medicaid coverage.
Access to health care and mental health -- Evidence from the ACA preexisting conditions provision
Matt Hampton & Otto Lenhart
Health Economics, forthcoming
Abstract:
This study evaluates the impact of the Affordable Care Act (ACA) preexisting conditions provision on mental health. The 2014 policy ensured individuals with preexisting health conditions the right to obtain insurance coverage. Using longitudinal data from the Panel Study of Income Dynamics between 2007 and 2017 and estimating difference-in-differences models, our study provides evidence that the policy reduced severe mental distress by 1.44 percentage points (baseline mean: 8.09%) among individuals with preexisting physical health conditions. Exploiting pre-ACA, state-level variation in policies providing insurance coverage options to people with preexisting conditions, we find that this improvement in mental well-being is highly associated with the presence of high-risk pools before 2014, which provided individuals with prior health conditions access to coverage. Specifically, we show that our main results are driven by individuals with preexisting health conditions living in the 16 states that did not have high-risk pools. Furthermore, gender-specific analysis shows that the reduction in mental distress is primarily observable among women. When examining potential mechanisms, our analysis provides evidence that increases in insurance coverage, reductions in healthcare expenditures, and improvements in physical health can explain the positive effects of the provision on mental well-being.
Intergenerational Health Effects of Medicaid
Hamid Noghanibehambari
Economics & Human Biology, forthcoming
Abstract:
This paper investigates the effects of the introduction of Medicaid during the 1960s on next generations’ birth outcomes. A federal mandate that all states must widen the coverage to all cash welfare recipients generated cross-state variations in Medicaid eligibility, specifically among nonwhites who largely overrepresented the target population. I implement a reduced-form difference-in-differences strategy that compares the birth outcomes of mothers born in states with higher cash welfare recipiency versus low welfare recipiency and different years relative to the Medicaid implementation year. Using Natality data (1970-2004), I find that Medicaid significantly improves birth outcomes. The effects are considerably larger among nonwhites, specifically blacks. The effects do not appear to be driven by preexisting trends in birth outcomes, preexisting trends in households’ socioeconomic characteristics, changes in other welfare expenditures, and selective fertility. A back-of-an-envelope calculation points to a minimum of 3.9 percent social externality of Medicaid through income rises due to next generations’ improvements in birth outcomes.
The effects of Medicaid expansion on home production and childcare
Aparna Soni & Taryn Morrissey
Southern Economic Journal, January 2022, Pages 931-950
Abstract:
Public health insurance programs like Medicaid provide in-kind resources that may improve health and reduce stress, altering time use patterns. Our study examines the effects of the Affordable Care Act (ACA)-facilitated Medicaid expansions on time spent on home production and childcare. Using time-diary data, we estimated difference-in-differences models comparing the time use patterns of individuals in states that expanded Medicaid versus non-expansion states, before and after implementation. Medicaid expansion increased the amount of time low-income adults spent on home production by 12 min per day (p < .05), equivalent to a 9.5% increase. This was driven by increased time spent on food preparation and housework. Medicaid expansion also increased time spent on childcare among low-income parents by 6.6 min per day (p < .10) or 7.7%. Expanding public health insurance eligibility for low-income populations may increase time spent on home production and childcare, which are associated with significant health benefits for children and adults.
The effects of the Affordable Care Act dependent coverage mandate on parents’ labor market outcomes
Seonghoon Kim & Kanghyock Koh
Labour Economics, forthcoming
Abstract:
We examine the labor market impacts of the Affordable Care Act dependent mandate (ACA-DM), which has significantly increased dependent children's health insurance coverage through parents’ employer-sponsored health benefits. Using data from the American Community Survey, we find that the ACA-DM reduced parents’ annual wages by about $2,600. However, the probability of employment and working hours only decreased marginally. The back-of-the-envelope calculation indicates that the magnitude of the estimated wage impact is similar to the increased insurance premium of a family plan due to the ACA-DM. These findings imply that a deadweight loss associated with the expansion of dependent health coverage is likely to be small as an increase in employers’ labor costs is offset by a reduction in parents’ wages without significant reductions in labor inputs.
Occupational Licensing and the Healthcare Labor Market
Marcus Dillender et al.
NBER Working Paper, January 2022
Abstract:
We examine the labor market impact of states easing occupational license requirements by expanding the scope of practice (SOP) for nurse practitioners (NPs), allowing them to practice without physician oversight. Using data on job postings, we find that employers increase their demand for NPs when states expand NP SOP. We then show that these laws increase NP earnings and reallocate NPs across the healthcare sector, increasing self-employment and changing industrial employment. However, we see no evidence that these laws have increased overall NP employment. Our results suggest that expanding NP SOP has the potential to increase the number of primary care providers, but inelastic labor supply for NPs is largely preventing this from occurring.
The Differential Effects of Malpractice Reform: Defensive Medicine in Obstetrics
Javier Cano-Urbina & Daniel Montanera
Journal of Law, Economics, and Organization, forthcoming
Abstract:
Recent studies argue that different types of patients are affected differently by changes in malpractice pressure. We argue that defensive medicine causes these differential effects. Our theoretical model predicts that reduced malpractice pressure decreases health care spending among patients with good access to care, but increases spending among those with poor access. We test this theory by estimating the effects of tort reforms on birth by cesarean section. Reduced malpractice pressure through collateral source rule reform decreases C-section rates by 4.75% for mothers with timely initiation of prenatal care. On the other hand, reduced pressure through noneconomic damages caps increase C-section rates by 7.59% for mothers without timely initiation. These findings are consistent with defensive medicine. Further investigation suggests that reduced pressure improves access to care for vulnerable populations and reduces utilization among well-served consumers. These findings explain the literature’s conflicting assessments of defensive medicine, despite its practice being widespread.
Do Physicians Warm Up to Higher Medicare Prices? Evidence from Alaska
Alice Chen et al.
Journal of Policy Analysis and Management, forthcoming
Abstract:
Medicare is a roughly $700 billion public program, with physician payments representing one of its largest expenditures. Medicare's prices are also administratively set, which leaves the structure of payment changes subject to a political process that may introduce idiosyncratic features and even perverse incentives. At the same time, physician responses to changes in Medicare reimbursements are likely to vary according to the policy's duration, scope, and size. We study a setting where broad federal laws contained specific provisions that financially benefit a narrow group: Alaskan physicians. The geographically targeted payment reforms were also unique along key dimensions. Using difference-in-differences strategies, we find that large, temporary price changes increase spending but elicit no detectable supply response. Conversely, generous and permanent price shocks induce greater service flows but not uniformly across specialties. Our findings suggest that Congress may engage in fiscally inefficient Medicare spending to accomplish other legislative objectives.
Quality Transparency and Healthcare Competition
John Kepler et al.
University of Chicago Working Paper, November 2021
Abstract:
Transparency of quality in the healthcare sector primarily aims to facilitate patients' care decisions, however, it also provides useful information to competing healthcare providers. We study how competitors respond to increased transparency about rivals' quality by exploiting a regulatory change that initiated disclosure about the quality of all kidney dialysis facilities in the United States. We show that competitors are 27% more likely to open new facilities near low-quality incumbents after the transparency program is implemented. We also show that the effect of transparency on competition is concentrated in states without licensing requirements that create barriers to entry. Evidence from patient referrals indicates that the new transparency regime increases the sensitivity of demand to quality and that the increase in competition is costly to low-quality incumbents, as they lose 31% of their referrals — equivalent to a $3.74 million loss of a facility's annual revenue — to higher-quality entrants. Finally, losing referrals leads incumbents to invest in better patient care through an immediate increase in the use of nurse practitioners and social workers.
Curbing the Opioid Epidemic at Its Root: The Effect of Provider Discordance After Opioid Initiation
Katherine Bobroske et al.
Management Science, forthcoming
Abstract:
Although medical research has addressed the clinical management of chronic opioid users, little is known about how operational interventions shortly after opioid initiation can impact a patient’s likelihood of long-term opioid use. Using a nationwide U.S. database of medical and pharmaceutical claims, we investigate the care delivery process at the most common entry point to opioid use: the primary care setting. For patients who return to primary care for a follow-up appointment within 30 days of opioid initiation, we ask who should revisit and potentially revise the opioid-based treatment plan: the initial prescriber (provider concordance) or an alternate clinician (provider discordance)? First, using a fully controlled logistic model, we find that provider discordance reduces the likelihood of long-term opioid use 12 months after opioid initiation by 31% (95% Confidence Interval: [18%, 43%]). Both the instrumental variable analysis technique and propensity-score matching (utilizing the minimum-bias estimator approach) account for omitted variable bias and indicate that this is a conservative estimate of the true causal effect. Second, looking at patient activities immediately after the follow-up appointment, we find that this long-term reduction is at least partially explained by an immediate reduction in opioids prescribed after the follow-up appointment. Third, the data suggest that the benefit associated with provider discordance remains significant regardless of whether the patient’s initial prescriber was their regular primary care provider or another clinician. Overall, our analysis indicates that systematic, operational changes in the early stages of managing new opioid patients may offer a promising, and hitherto overlooked, opportunity to curb the opioid epidemic.
The Extent of Externalities from Medicare Payment Policy
Alice Chen et al.
American Journal of Health Economics, forthcoming
Abstract:
Medicare accounts for roughly 20% of medical expenditures in the United States and is the dominant payer for many treatments. Consequently, Medicare payment policy may have diffuse consequences. Using a contemporary bundled payment reform (the “CJR” program) and a difference-in-differences research design, we estimate Medicare’s spillover reach. We find that altered treatment decisions for targeted joint replacement procedures are closely, though not perfectly, mirrored between traditional Medicare, Medicare Advantage, and the non-elderly commercially insured populations. Results for untargeted procedures performed by CJR-affected physicians also show suggestive evidence consistent with a secondary spillover effect; however, this behavior change does not extend to less related procedures. Our findings align with the “norms hypothesis” for physician decision-making but do not imply rigid and uniform treatment choices. Instead, key decision nodes appear to gain greater salience under Medicare’s new incentive structure, which leads to revised treatment choices for different payer-procedure combinations. Ignoring the breadth of externalities from Medicare policies risks understating their social welfare impact.
Did the Medicaid expansion reduce service utilization among the Medicare population?
Christopher Brunt
Applied Economics, February 2022, Pages 1172-1198
Abstract:
While a large and growing literature has examined the effects of the Affordable Care Act’s Medicaid expansion on newly eligible Medicaid recipients, relatively few studies have explored whether increased Medicaid service utilization has had any negative spillover effects on the Medicare population. This study uses county-level data on Medicare fee-for-service (FFS) utilization from 2007 to 2018 in conjunction with inverse probability of treatment adjusted difference-in-differences and event study models with a variety of inter-temporal controls and county-level fixed effects. It finds highly significant effects of modest magnitude providing evidence of negative spillovers on the traditional Medicare Fee-for-service (FFS) population. FFS Medicare Beneficiaries in Medicaid expansion states experienced a 1% reduction in Evaluation and Management (E&M) visits, a 2.1% reduction in testing services, collectively reducing their volume of visits across Berenson-Eggers Type of Service (BETOS) categories by 0.7%.