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Mortality Effects and Choice Across Private Health Insurance Plans

Jason Abaluck (), Mauricio Caceres Bravo (), Peter Hull () and Amanda Starc ()
Additional contact information
Jason Abaluck: Yale University - School of Management; NBER
Mauricio Caceres Bravo: Brown University - Department of Economics
Amanda Starc: Northwestern University - Kellogg School of Management; NBER

No 2020-108, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: Competition in health insurance markets may fail to improve health outcomes if consumers are not willing to pay for high quality plans. We document large differences in the mortality rates of Medicare Advantage (MA) plans within local markets. We then show that when high (low) mortality plans exit these markets, enrollees tend to switch to more typical plans and subsequently experience lower (higher) mortality. We develop a framework that uses this variation to estimate the relationship between observed mortality rates and causal mortality effects; we find a tight link. We then extend the framework to study other predictors of mortality effects and estimate consumer willingness to pay. Higher spending plans tend to reduce enrollee mortality, but existing quality ratings are uncorrelated with plan mortality effects. Consumers place little weight on mortality effects when choosing plans. Moving beneficiaries out of the bottom 5% of plans could save tens of thousands of elderly lives each year.

Pages: 60 pages
Date: 2020
New Economics Papers: this item is included in nep-hea and nep-ias
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https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_2020108.pdf (application/pdf)

Related works:
Journal Article: Mortality Effects and Choice Across Private Health Insurance Plans* (2021) Downloads
Working Paper: Mortality Effects and Choice Across Private Health Insurance Plans (2020) Downloads
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