The effects of retiree health insurance plan characteristics on retirees’ choice and employers’ costs

Robert L. Clark, Melinda Morrill and David Vanderweide

Journal of Health Economics, 2014, vol. 38, issue C, 119-129

Abstract: To moderate the rate of growth of retiree health insurance costs, employers can modify plans and move retirees into less expensive plans. We examine policy modifications implemented by the North Carolina State Health Plan. We investigate whether incentives produce the desired plan elections and whether these changes, along with cost shifting, produce the expected reductions in cost growth. Using individual-level administrative data, along with aggregated data on expenditures for retirees, we estimate the effects of the introduction and subsequent repeal of a Comprehensive Wellness Initiative for non-Medicare eligible retirees, as well as increases in coinsurance and copayments and the introduction of a premium for all retirees. Over a third of non-Medicare retirees shifted into the least generous plan between June 2009 and December 2012. The level effects on annual costs and unfunded accrued liabilities were relatively modest, but growth rates were diminished. Increases in the retiree premiums reduced the state's projected costs.

Keywords: Health insurance; Retiree health insurance; Plan choice; Wellness programs; Medical care; Unfunded actuarially accrued liabilities (search for similar items in EconPapers)
JEL-codes: H7 I11 I13 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: The Effects of Retiree Health Insurance Plan Characteristics on Retirees' Choice and Employers' Costs (2013)
Working Paper: The Effects of Retiree Health Insurance Plan Characteristics on Retirees' Choice and Employers' Costs (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:38:y:2014:i:c:p:119-129

DOI: 10.1016/j.jhealeco.2014.02.007

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