Working Papers

Cross-Market Selection in U.S. Health Insurance Markets

In 2016 and 2017, programs that paid 12 billion dollars annually to health insurers operating on the individual market in the U.S. were ended. Using variation in exposure to these programs as identification, I find insurers increased premiums approximately dollar-for-dollar in response to their reduced revenue. Among insurers that had a large unexpected reduction in risk corridor payments, 35% went out of business, compared to only 4% of insurers that had similar predictable reductions in reinsurance payments. As a consequence of higher premiums and reduced competition, enrollment on the individual market as a fraction of the population fell by 1% per $1000 reduction in insurer revenues. Reductions in enrollment among high income individuals were offset by increases in enrollment in employer sponsored insurance, while uninsurance rates rose for middle income individuals. Medicaid expansion states, which had a healthier individual market population, had smaller price increases and smaller decreases in individual market enrollment. Since both people and insurance companies can switch to other insurance markets, policies that target any particular insurance market can spill over to affect others.

Selected Work in Progress

How do Health Insurance Premiums Affect Employment Among Adults with Expensive Health Conditions? with Kurt Lavetti

Insurer Innovation and Health Care Efficiency: Evidence from Utah with Ben Handel, Jon Kolstad, and Kurt Lavetti

Published Work

Is This Time Different? The Slowdown in Health Spending with Amitabh Chandra and Jonathan Skinner
Brookings Papers on Economic Activity, Vol 47, No. 2 (2013)

Large Increases In Spending On Postacute Care In Medicare Point To The Potential For Cost Savings In These Settings with Amitabh Chandra and Maurice Dalton
Health Affairs, Vol 32, No. 5 (2013)