Health Insurance Reform: The Impact of a Medicare Buy-In / Gary D. Hansen, Minchung Hsu, Junsang Lee.

Format:

Book

Author/Creator:

Hansen, Gary D.

Contributor:

National Bureau of Economic Research.

Hsu, Minchung.

Lee, Junsang.

Series:

Working Paper Series (National Bureau of Economic Research) no. w18529.

NBER working paper series no. w18529

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2012.

Summary:

The steady state general equilibrium and welfare consequences of health insurance reform are evaluated in a calibrated life-cycle economy with incomplete markets and endogenous labor supply. Individuals face uncertainty each period about their future health status, medical expenditures, labor productivity, access to employer provided group health insurance, and the length of their life. In this environment, incomplete markets and adverse selection, which restricts the type of insurance contracts available in equilibrium, creates a potential role for health insurance reform. In particular, we consider a policy reform that would allow older workers (aged 55-64) to purchase insurance similar to Medicare coverage. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance. Hence, we compare the equilibrium properties of the current insurance system with those that obtain with an optional buy-in subsidized by the government, as well as with several types of health insurance mandates.

Notes:

Print version record

November 2012.