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Extrapolation using Selection and Moral Hazard Heterogeneity from within the Oregon Health Insurance Experiment

Amanda Kowalski

No 2135, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: I aim to shed light on why emergency room (ER) utilization increased following the Oregon Health Insurance Experiment but decreased following a Massachusetts policy. To do so, I unite the literatures on insurance and treatment effects. Under an MTE model that assumes no more than the LATE assumptions, comparisons across always takers, compliers, and never takers can inform the impact of polices that expand and contract coverage. Starting from the Oregon experiment as the “gold standard,” I make comparisons within Oregon and extrapolate my findings to Massachusetts. Within Oregon, I find adverse selection and heterogeneous moral hazard. Although previous enrollees increased their ER utilization, evidence suggests that subsequent enrollees will be healthier, and they will decrease their ER utilization. Accordingly, I can reconcile the Oregon and Massachusetts results because the Massachusetts policy expanded coverage from a higher baseline, and new enrollees reported better health.

Keywords: Compliers; Marginal treatment effect; Massachusetts health reform; Program evaluation; Treated outcome test; Untreated outcome test (search for similar items in EconPapers)
JEL-codes: C1 C9 H4 I13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-hea and nep-ias
Date: 2018-06
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