EconPapers    
Economics at your fingertips  
 

Incentive and Selection Effects of Medigap Insurance on Inpatient Care

Valentino Dardanoni (vdardano@unipa.it) and Paolo Li Donni (paolo.lidonni@unipa.it)

No 1203, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: The Medicare program, which provides insurance coverage to the elderly in the United States, does not protect them fully against high out-of-pocket costs. For this reason private supplementary insurance, named Medigap, has been available to cover Medicare gaps. This paper studies how Medigap affects the utilization of inpatient care, separating the incentive and selection effects of supplementary insurance. For this purpose, we use two alternative estimation methods: a standard recursive bivariate probit and a discrete multivariate finite mixture model. We find that estimated incentive effects are modest and quite similar across models. On the other hand, there seems to be very significant selection when one conditions only on variables used by Medigap insurers, with the presence of both adversely and advantageously selected individuals, stemming from the multidimensional nature of residual heterogeneity.

Pages: 29 pages
Date: 2012, Revised 2012-02
New Economics Papers: this item is included in nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.eief.it/files/2012/09/wp-03-incentive-a ... n-inpatient-care.pdf (application/pdf)

Related works:
Journal Article: Incentive and selection effects of Medigap insurance on inpatient care (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:1203

Access Statistics for this paper

More papers in EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF) Contact information at EDIRC.
Bibliographic data for series maintained by Facundo Piguillem (facundo.piguillem@eief.it).

 
Page updated 2024-12-22
Handle: RePEc:eie:wpaper:1203