The Effects of Retiree Health Insurance Plan Characteristics on Retirees' Choice and Employers' Costs

Robert Clark, Melinda Morrill and David Vanderweide

No 19566, NBER Working Papers from National Bureau of Economic Research, Inc

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 projected costs.

JEL-codes: H75 I13 J32 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
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Published as The Effects of Retiree Health Insurance Plan Characteristics on Retirees' Choice and Employers' Costs , Robert Clark, Melinda Morrill, David Vanderweide. in State and Local Health Plans for Active and Retired Public Employees , Clark and Newhouse. 2014
Published as Robert L. Clark & Melinda Sandler Morrill & David Vanderweide, 2014. "The effects of retiree health insurance plan characteristics on retirees’ choice and employers’ costs," Journal of Health Economics, vol 38, pages 119-129.

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Journal Article: The effects of retiree health insurance plan characteristics on retirees’ choice and employers’ costs (2014)
Chapter: The Effects of Retiree Health Insurance Plan Characteristics on Retirees' Choice and Employers' Costs (2013)
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