Partial Outsourcing of Public Programs: Evidence on Determinants of Choice in Medicare

Marika Cabral, Colleen Carey and Jinyeong Son

No 31141, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many public programs let individuals choose between publicly provided benefits and a subsidized private alternative. We investigate the determinants of health insurance choice in Medicare—a setting with vast geographic variation in the share of individuals selecting the public option versus private alternative. We analyze insurance decisions among individuals who move to quantify the relative importance of individual-specific factors (such as preferences or income) and place-specific factors (such as local health insurance options) on insurance decisions. We find roughly 40% of the geographic variation in the share selecting private coverage is due to place-based factors, while the remainder is explained by individuals. Our findings highlight the importance of individual factors in these decisions and may inform discussions about the use of policy to address geographic disparities.

JEL-codes: H51 I11 I13 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-hea and nep-pub
Note: EH PE
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