Plans
The Political Geography of ACA Marketplaces: How Political Behavior Can Help Explain Where the ACA Works, and Where it Doesn't
Samuel Trachtman
University of California Working Paper, December 2017
Abstract:
Political scientists have only recently begun paying attention to the ways that individuals’ politics affect their participation in government programs. In particular, it has been shown that Republicans, ceteris paribus, are less likely to enroll in Affordable Care Act marketplace insurance than Democrats. I argue that these decisions are consequential not only for the coverage of individuals, but also for the cost of plans. Due to adverse selection, partisanship-motivated enrollment decisions result in the average Republican enrollee, holding other factors constant, being less healthy than the average Democratic enrollee. I provide empirical evidence demonstrating that insurers have responded to these differences in enrollee composition by increasing prices at a faster rate in areas with more Republican voters. These findings have implications for the design of public policies in an environment where politics can influence uptake decisions.
The Effect of the Risk Corridors Program on Marketplace Premiums and Participation
Daniel Sacks et al.
NBER Working Paper, December 2017
Abstract:
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.
Did UberX Reduce Ambulance Volume?
Leon Moskatel & David Slusky
University of Kansas Working Paper, October 2017
Abstract:
Ambulances are a vital part of emergency medical services. However, they come in single, homogeneous, high intervention form, which is at times unnecessary, resulting in excessive costs for patients and insurers. In this paper, we ask whether UberX’s entry into a city caused substitution away from traditional ambulances for low risk patients, reducing overall volume. Using a city-panel over-time and leveraging that UberX enter markets sporadically over multiple years, we find that UberX entry reduced the per-capita ambulance volume by at least 7%. Our result is robust to numerous specifications.
Effect of Medicaid Expansions of 2014 on Overall and Early-Stage Cancer Diagnoses
Aparna Soni et al.
American Journal of Public Health, February 2018, Pages 216-218
Methods: We used Surveillance, Epidemiology, and End Results Cancer Registry data from 2010 through 2014 to estimate a difference-in-differences model of cancer diagnosis rates, both overall and by stage, comparing changes in county-level diagnosis rates in US states that expanded Medicaid in 2014 with those that did not expand Medicaid.
Results: Among the 611 counties in this study, Medicaid expansion was associated with an increase in overall cancer diagnoses of 13.8 per 100 000 population (95% confidence interval [CI] = 0.7, 26.9), or 3.4%. Medicaid expansion was also associated with an increase in early-stage diagnoses of 15.4 per 100 000 population (95% CI = 5.4, 25.3), or 6.4%. There was no detectable impact on late-stage diagnoses.
Conclusions: In their first year, the 2014 Medicaid expansions were associated with an increase in cancer diagnosis, particularly at the early stage, in the working-age population.
The Effect of Health Insurance Coverage Expansions on Auto Liability Claims and Costs
Srikanth Kadiyala & Paul Heaton
RAND Working Paper, June 2017
Abstract:
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.
Public Health Insurance Take-Up and Labor Supply: Evidence from State Expansions in Coverage to Childless Adults in the Early 2000s
Michael DiNardi
University of Connecticut Working Paper, December 2017
Abstract:
This paper considers the effects of public health insurance expansions for low-income childless adults in the early 2000s in a causal framework, prior to passage of the 2010 Affordable Care Act. Using the 1998 through 2007 March Current Population Surveys, my estimates suggest the expansions increased low-educated childless women's public health insurance coverage by 1.6 to 2.5 percentage points, but the results do not provide evidence of a change in public health insurance coverage for low-educated childless men. I do not find any statistically significant negative effects on the labor supply of low-educated childless men or women, despite an increase in take-up for women. While the estimates are imprecise, confidence intervals rule out the possibility of large negative labor supply effects. These results are also supported by event study analyses.
Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry
Martin Hackmann
NBER Working Paper, December 2017
Abstract:
This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from Pennsylvania, I estimate the parameters of the model. The findings indicate that nursing homes increase the quality of care, measured by the number of skilled nurses per resident, by 8.8% following a universal 10% increase in Medicaid reimbursement rates. In contrast, I find that pro-competitive policies lead to only small increases in skilled nurse staffing ratios, suggesting that Medicaid increases are more cost effective in raising the quality of care.
National Health Care Spending In 2016: Spending And Enrollment Growth Slow After Initial Coverage Expansions
Micah Hartman et al.
Health Affairs, January 2018, Pages 150-160
Abstract:
Total nominal US health care spending increased 4.3 percent and reached $3.3 trillion in 2016. Per capita spending on health care increased by $354, reaching $10,348. The share of gross domestic product devoted to health care spending was 17.9 percent in 2016, up from 17.7 percent in 2015. Health spending growth decelerated in 2016 following faster growth in 2014 and 2015 associated with coverage expansions under the Affordable Care Act (ACA) and strong retail prescription drug spending growth. In 2016 the slowdown was broadly based, as spending for the largest categories by payer and by service decelerated. Enrollment trends drove the slowdown in Medicaid and private health insurance spending growth in 2016, while slower per enrollee spending growth influenced Medicare spending. Furthermore, spending for retail prescription drugs slowed, partly as a result of lower spending for drugs used to treat hepatitis C, while slower use and intensity of services drove the slowdown in hospital care and physician and clinical services.
Differences in Morbidity and Mortality Rates in Black, White, and Hispanic Very Preterm Infants Among New York City Hospitals
Elizabeth Howell et al.
JAMA Pediatrics, forthcoming
Design, Setting, and Participants: Population-based retrospective cohort study of 7177 nonanomalous infants born between 24 and 31 completed gestational weeks in 39 New York City hospitals using linked 2010 to 2014 New York City discharge abstract and birth certificate data sets. Mixed-effects logistic regression with a random hospital-specific intercept was used to generate risk-adjusted neonatal morbidity and mortality rates for very preterm infants in each hospital. Hospitals were ranked using this measure, and differences in the distribution of black, Hispanic, and white very preterm births were assessed among these hospitals. The statistical analysis was performed in 2016-2017.
Results: Among 7177 very preterm births (VPTBs), morbidity and mortality occurred in 2011 (28%) and was higher among black (893 [32.2%]) and Hispanic (610 [28.1%]) than white (319 [22.5%]) VPTBs (2-tailed P < .001). The risk-standardized morbidity and mortality rate was twice as great for VPTB infants born in hospitals in the highest morbidity and mortality tertile (0.40; 95% CI, 0.38-0.41) as for those born in the lowest morbidity and mortality tertile (0.16; 95% CI, 0.14-0.18). Black (1204 of 2775 [43.4%]) and Hispanic (746 of 2168 [34.4%]) VPTB infants were more likely than white (325 of 1418 [22.9%]) VPTB infants to be born in hospitals in the highest morbidity and mortality tertile (2-tailed P < .001; black-white difference, 20%; 95% CI, 18%-23% and Hispanic-white difference, 11%; 95% CI, 9%-14%). The largest proportion of the explained disparities can be attributed to differences in infant health risks among black, Hispanic, and white VPTB infants. However, 40% (95% CI, 30%-50%) of the black-white disparity and 30% (95% CI, 10%-49%) of the Hispanic-white disparity was explained by birth hospital.
Conclusions and Relevance: Black and Hispanic VPTB infants are more likely to be born at hospitals with higher risk-adjusted neonatal morbidity and mortality rates, and these differences contribute to excess morbidity and mortality among black and Hispanic infants.
The Effect of Primary Care Visits on Health Care Utilization: Findings from a Randomized Controlled Trial
Cathy Bradley, David Neumark & Lauryn Saxe Walker
NBER Working Paper, December 2017
Abstract:
We conducted a randomized controlled trial, enrolling low-income uninsured adults to determine whether cash incentives are effective at encouraging a primary care provider (PCP) visit, and at lowering utilization and spending. Subjects were randomized to four groups: untreated controls, and one of three incentive arms with incentives of $0, $25, or $50 for visiting a PCP within six months of group assignment. Compared to the untreated controls, subjects in the incentive groups were more likely to have a PCP visit in the initial six months. They had fewer ED visits in the subsequent six months, but outpatient visits did not decline. We also used the exogenous variation generated by the experiment to obtain causal evidence on the effects of a PCP visit. We observed modest reductions in emergency department use and increased outpatient use, but no reductions in overall spending.
Completion of Requirements in Iowa’s Medicaid Expansion Premium Disincentive Program, 2014–2015
Brad Wright et al.
American Journal of Public Health, February 2018, Pages 219-223
Methods: We used 2014 to 2015 Iowa Medicaid data to construct rolling 12-month cohorts of Wellness Plan and Marketplace Choice members (Iowa’s 2 Medicaid expansion waiver programs for individuals ≤ 100% and 101%–138% of the federal poverty level, respectively), calculated completion rates for required activities (i.e., wellness examinations and health risk assessments), and identified factors associated with program compliance.
Results: Overall, 18.5% of Wellness Plan and 12.5% of Marketplace Choice members completed both activities (P < .001). From 2014 to 2015, completion rates for both activities decreased for Wellness Plan members but increased for Marketplace Choice members. Members who were younger, male, or non-White were less likely to complete required activities.
Conclusions: Approximately 81% of Wellness Plan members and 87% of Marketplace Choice members failed to comply with program requirements and should have been subject to paying premiums the following year or face disenrollment. Disparities in completion rates may exacerbate disparities in insurance coverage and health outcomes.
Understanding The Relationship Between Medicaid Expansions And Hospital Closures
Richard Lindrooth et al.
Health Affairs, January 2018, Pages 111-120
Abstract:
Decisions by states about whether to expand Medicaid under the Affordable Care Act (ACA) have implications for hospitals’ financial health. We hypothesized that Medicaid expansion of eligibility for childless adults prevents hospital closures because increased Medicaid coverage for previously uninsured people reduces uncompensated care expenditures and strengthens hospitals’ financial position. We tested this hypothesis using data for the period 2008–16 on hospital closures and financial performance. We found that the ACA’s Medicaid expansion was associated with improved hospital financial performance and substantially lower likelihoods of closure, especially in rural markets and counties with large numbers of uninsured adults before Medicaid expansion. Future congressional efforts to reform Medicaid policy should consider the strong relationship between Medicaid coverage levels and the financial viability of hospitals. Our results imply that reverting to pre-ACA eligibility levels would lead to particularly large increases in rural hospital closures. Such closures could lead to reduced access to care and a loss of highly skilled jobs, which could have detrimental impacts on local economies.
The Persistence of Medicare Advantage Spillovers in the Post-Affordable Care Act Era
Yevgeniy Feyman & Austin Frakt
Harvard Working Paper, November 2017
Abstract:
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.
Does Part D abet advantageous selection in Medicare Advantage?
Tony Han & Kurt Lavetti
Journal of Health Economics, December 2017, Pages 368–382
Abstract:
The use of risk-adjustment formulae in setting payments to Medicare Advantage (MA) plans reduces the potential for advantageous selection on factors included in the formulae, but can theoretically worsen overall selection if plans are able to target beneficiaries based on excluded factors. Since MA medical risk-adjustment excludes prescription drug utilization, demand for drugs can be exploited by plans to induce advantageous selection. We show evidence that the introduction of Medicare Part D provided a mechanism for MA plans to increase selection, and that consumers responded, increasing MA market shares among beneficiaries taking drugs associated with the strongest advantageous selection incentives. For the average Medicare beneficiary in our sample, we estimate that this change in advantageous selection following the introduction of Medicare Part D increased the probability of enrolling in an MA plan by about 7.1%.
Medical Malpractice Liability Exposure and OB/GYN Physician Delivery Decisions
Christine Piette Durrance & Scott Hankins
Health Services Research, forthcoming
Objective: This study examines the effect of physician medical malpractice liability exposure on primary Cesarean and vaginal births after Cesarean (VBACs).
Data Sources/Study Setting: Secondary data on hospital births from Florida Hospital Inpatient File, physician characteristics from American Medical Association Physician Masterfile, and physician malpractice claim history from Florida Office of Insurance Regulation.
Study Design: Our study estimates the effects of physician malpractice liability exposure on Cesareans and VBACs using panel data and a multivariate, fixed effects model.
Data Collection: We merge three secondary data sources based on unique physician license numbers between 1994 and 2010.
Principal Findings: We find no evidence that the first malpractice claim affects primary Cesarean deliveries. We find, however, that the first malpractice claim decreases the likelihood of a VBAC (conditional on a prior Cesarean delivery) by 1.2–1.9 percentage points (approximately 10 percent relative to mean VBAC incidence). This finding is robust to focusing on obstetrics-related malpractice claims, as well as to considering different malpractice claims (first report, first severe report, and first lawsuit).
Conclusions: Given the increase in both primary and repeat Cesarean deliveries, our results suggest that physician malpractice liability exposure is responsible for a relatively small share of the VBAC decrease.
Demand elasticities and service selection incentives among competing private health plans
Randall Ellis, Bruno Martins & Wenjia Zhu
Journal of Health Economics, December 2017, Pages 352–367
Abstract:
We examine selection incentives by health plans while refining the selection index of McGuire et al. (2014) to reflect not only service predictability and predictiveness but also variation in cost sharing, risk-adjusted profits, profit margins, and newly-refined demand elasticities across 26 disaggregated types of service. We contrast selection incentives, measured by service selection elasticities, across six plan types using privately-insured claims data from 73 large employers from 2008 to 2014. Compared to flat capitation, concurrent risk adjustment reduces the elasticity by 47%, prospective risk adjustment by 43%, simple reinsurance system by 32%, and combined concurrent risk adjustment with reinsurance by 60%. Reinsurance significantly reduces the variability of individual-level profits, but increases the correlation of expected spending with profits, which strengthens selection incentives.
Medicare Advantage Enrollees More Likely To Enter Lower-Quality Nursing Homes Compared To Fee-For-Service Enrollees
David Meyers, Vincent Mor & Momotazur Rahman
Health Affairs, January 2018, Pages 78-85
Abstract:
Unlike fee-for-service (FFS) Medicare, most Medicare Advantage (MA) plans have a preferred network of care providers that serve most of a plan’s enrollees. Little is known about how the quality of care MA enrollees receive differs from that of FFS Medicare enrollees. This article evaluates the differences in the quality of skilled nursing facilities (SNFs) that Medicare Advantage and FFS beneficiaries entered in the period 2012–14. After we controlled for patients’ clinical, demographic, and residential neighborhood effects, we found that FFS Medicare patients have substantially higher probabilities of entering higher-quality SNFs (those rated four or five stars by Nursing Home Compare) and those with lower readmission rates, compared to MA enrollees. The difference between MA and FFS Medicare SNF selections was less for enrollees in higher-quality MA plans than those in lower-quality plans, but Medicare Advantage still guided patients to lower-quality facilities.
Is HIT a hit? The impact of health information technology on inpatient hospital outcomes
Ryan McKenna, Debra Dwyer & John Rizzo
Applied Economics, forthcoming
Abstract:
In an effort to eliminate inefficiencies in the US health care sector, policymakers have made a concerted effort to encourage hospitals and physicians to adopt health information technology (HIT) systems. Using a unique data set on HIT adoption and health outcomes in New York State, we conduct a hospital-level analysis identifying the impact of adopting HIT on inpatient outcomes (rates of adverse drug events and severity-adjusted mortality). Unlike previous studies, the patient population is not restricted to Medicare patients, but covers all ages and insurance types. After controlling for unobserved hospital quality and endogenous HIT adoption, our results suggest that a hospital’s severity-adjusted mortality decreases by 0.3 percentage points. When restricted to the Medicare patients, we find HIT adoption lowers a hospital’s severity-adjusted mortality rate by 0.5 percentage points. We find HIT to have no significant effect on the rate of ADEs.
Open Enrollment Periods and Plan Choices
Francesco Decarolis, Andrea Guglielmo & Calvin Luscombe
NBER Working Paper, December 2017
Abstract:
Open enrollment periods are pervasively used in insurance markets to limit adverse selection risks resulting when enrollees can switch plans at will. We exploit a change in the open enrollment rules of Medicare Part C and Part D to analyze how Medicare beneficiaries responded to the option of switching to 5-star rated plans at anytime, in a setting where insurers adjusted premiums and benefit design to counterbalance the increased selection risk. We find that within-year switches to 5-star plans increased by 7-16% and that those who switch are advantageously selected. Furthermore, demand for 5-star plans across the years did not change.
Increased Medicaid Payment and Participation by Office-Based Primary Care Pediatricians
Suk-fong Tang et al.
Pediatrics, January 2018
Background and objectives: Whether the Medicaid primary care payment increase of 2013 to 2014 changed physician participation remains unanswered amid conflicting evidence. In this study, we assess national and state-level changes in Medicaid participation by office-based primary care pediatricians before and after the payment increase.
Methods: Using bivariate statistical analysis, we compared survey data collected from 2011 to 2012 and 2015 to 2016 by the American Academy of Pediatrics from state-stratified random samples of pediatrician members.
Results: By 4 of 5 indicators, Medicaid participation increased nationally from 2011 and 2012 to 2015 and 2016 (n = 10 395). Those accepting at least some new patients insured by Medicaid increased 3.0 percentage points (ppts) to 77.4%. Those accepting all new patients insured by Medicaid increased 5.9 ppts to 43.3%, and those accepting these patients at least as often as new privately insured patients increased 5.7 ppts to 55.6%. The average percent of patients insured by Medicaid per provider panel increased 6.0 ppts to 31.3%. Nonparticipants dropped 2.1 ppts to 14.6%. Of the 27 studied states, 16 gained in participation by 1 or more indicators, 11 gained by 2 or more, and 3 gained by all 5.
Conclusions: Office-based primary care pediatricians increased their Medicaid participation after the payment increase, in large part by expanding their Medicaid panel percentage. Continued monitoring of physician participation in Medicaid at the national and state levels is vital for guiding policy to optimize timely access to appropriate health care for >37 million children insured by Medicaid.
Returns to Specialization: Evidence from the Outpatient Surgery Market
Elizabeth Munnich & Stephen Parente
Journal of Health Economics, January 2018, Pages 147-167
Abstract:
Technological changes in medicine have created new opportunities to provide surgical care in lower cost, specialized facilities. This paper examines patient outcomes in ambulatory surgery centers (ASCs), which were developed as a low-cost alternative to outpatient surgery in hospitals. Because we are concerned that selection into ASCs may bias estimates of facility quality, we use predicted changes in federally set Medicare facility payment rates as an instrument for ASC utilization to estimate the effect of location of treatment on patient outcomes. We find that patients treated in an ASC are less likely to be admitted to a hospital or visit an emergency room a short time after outpatient surgery. The findings in this paper indicate that factors other than patient and physician heterogeneity contribute to the observed returns to specialization in the ASC market.