The value of coverage in the medicare advantage insurance market

Abe Dunn

Journal of Health Economics, 2010, vol. 29, issue 6, 839-855

Abstract: Abstract This paper examines the impact of coverage on demand for health insurance in the Medicare Advantage (MA) insurance market. Estimating the effects of coverage on demand poses a challenge for researchers who must consider both the hundreds of benefits that affect out-of-pocket costs (OOPC) to consumers, but also the endogeneity of coverage. These problems are addressed in a discrete choice demand model by employing a unique measure of OOPC that considers a consumer's expected payments for a fixed bundle of health services and applying instrumental variable techniques to address potential endogeneity bias. The results of the demand model show that OOPC have a significant effect on consumer surplus and that not instrumenting for OOPC results in a significant underestimate of the value of coverage.

Keywords: Medicare; advantage; Health; insurance; Demand; Consumer; surplus (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Working Paper: The Value of Coverage in the Medicare Advantage Insurance Market (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:29:y:2010:i:6:p:839-855

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