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Medicare Part D: Are Insurers Gaming the Low Income Subsidy Design?†.
- Source :
- American Economic Review; Apr2015, Vol. 105 Issue 4, p1547-1580, 34p, 9 Charts, 5 Graphs, 1 Map
- Publication Year :
- 2015
-
Abstract
- This paper shows how in Medicare Part D insurers' gaming of the subsidy paid to low-income enrollees distorts premiums and raises the program cost. Using plan-level data from the first five years of the program, I find multiple instances of pricing strategy distortions for the largest insurers. Instrumental variable estimates indicate that the changes in a concentration index measuring the manipulability of the subsidy can explain a large share of the premium growth observed between 2006 and 2011. Removing this distortion could reduce the cost of the program without worsening consumer welfare.(JEL G22, H51, I13, I18) [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00028282
- Volume :
- 105
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- American Economic Review
- Publication Type :
- Academic Journal
- Accession number :
- 101792157
- Full Text :
- https://doi.org/10.1257/aer.20130903