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Do Individuals Respond to Cost-Sharing Subsidies in their Selections of Marketplace Health Insurance Plans?
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IZA Seminar |
Place: Schaumburg-Lippe-Str. 9, 53113 Bonn |
Date: 02.11.2017, 12:15 - 13:30 |
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Abstract: |
The Affordable Care Act (ACA) provides assistance to low-income consumers
through both premium subsidies and cost-sharing reductions (CSRs). Low-income
consumers’ lack of health insurance literacy or information regarding CSRs may
lead them to not take-up CSR benefits for which they are eligible. We use
administrative data from 2014 to 2016 on roughly 22 million health insurance plan
choices of low-income individuals enrolled in ACA Marketplace coverage to
assess whether they behave in a manner consistent with being aware of the
availability of CSRs. We take advantage of discontinuous changes in the schedule
of CSR benefits to show that consumers are highly sensitive to the value of CSRs
when selecting insurance plans and that a very low percentage select dominated
plans. These findings suggest that CSR subsidies are salient to consumers and that
the program is well designed to account for any lack of health insurance literacy
among the low-income population it serves. |
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Download complete paper  |
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For more information, please contact seminar@iza.org
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