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Insurance without Commitment: Evidence from the ACA Marketplaces / Rebecca Diamond, Michael J. Dickstein, Timothy McQuade, Petra Persson.
- Format:
- Book
- Author/Creator:
- Diamond, Rebecca.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w24668.
- NBER working paper series no. w24668
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- We study the dynamics of participation and health care consumption in the Affordable Care Act's health insurance marketplaces. Unlike other health insurance contexts, we find individuals commonly drop coverage midyear-roughly 30% of enrollees exit within nine months of sign-up. While covered, dropouts spend more on health care than in the months before sign-up or after exit. We model the consequences of drop-out on equilibrium premiums and consumer welfare. While dropouts generate a type of adverse selection, the welfare effect from their participation is ambiguous and depends on the relative costs per month of part-year vs. full-year enrollees. In our empirical setting, we find that imposing a penalty that incentivizes participation for at least 3.5 months would lower premium levels and improve overall consumer welfare.
- Notes:
- Print version record
- May 2018.
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