Analysis Group, Inc
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Institutional Affiliation: Analysis Group, Inc.
NBER Working Papers and Publications
|December 2017||Open Enrollment Periods and Plan Choices|
with Francesco Decarolis, Calvin Luscombe: w24156
Open enrollment periods are pervasively used in insurance markets to limit adverse selection risks resulting when enrollees can switch plans at will. We exploit a change in the open enrollment rules of Medicare Advatage to analyze how beneficiaries responded to the option of switching to a 5-star rated plan at anytime, in a setting where insurers adjusted premiums and benefit design to counterbalance the increased selection risk. We present three findings: within-year switches to 5-star plans increase by 7-16%; demand for 5-star plans across the years does not change; the enrollees who switch to a 5-star plan during the year are in better health status than those who do not switch.
|December 2016||Insurers' Response to Selection Risk: Evidence from Medicare Enrollment Reforms|
with Francesco Decarolis: w22876
Evidence on insurers’ behavior in environments with both risk selection and market power is largely missing. We fill this gap by providing one of the first empirical accounts of how insurers adjust plan features when faced with potential changes in selection. Our strategy exploits a 2012 reform allowing Medicare enrollees to switch to 5-star contracts at anytime. This policy increased enrollment into 5-star contracts, but without risk selection worsening. Our findings show that this is due to 5-star plans lowering both premiums and generosity, thus becoming more appealing for most beneficiaries, but less so for those in worse health conditions.
Published: Francesco Decarolis & Andrea Guglielmo, 2017. "Insurers’ response to selection risk: Evidence from Medicare enrollment reforms," Journal of Health Economics, vol 56, pages 383-396. citation courtesy of