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Mortality Effects and Choice Across Private Health Insurance Plans

Author

Listed:
  • Jason Abaluck
  • Mauricio M. Caceres Bravo
  • Peter Hull
  • Amanda Starc
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.

Suggested Citation

  • Jason Abaluck & Mauricio M. Caceres Bravo & Peter Hull & Amanda Starc, 2020. "Mortality Effects and Choice Across Private Health Insurance Plans," NBER Working Papers 27578, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27578
    Note: AG EH IO LS PE
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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