Mortality Effects and Choice Across Private Health Insurance Plans

Jason Abaluck, Mauricio M. Caceres Bravo, Peter Hull and Amanda Starc

No 27578, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: C26 I11 J14 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-dem, nep-hea and nep-ias
Note: AG EH IO LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Published as Jason Abaluck & Mauricio Caceres Bravo & Peter Hull: & Amanda Starc, 2021. "Mortality Effects and Choice Across Private Health Insurance Plans," The Quarterly Journal of Economics, Oxford University Press, vol. 136(3), pages 1557-1610.

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