Details

Related name

• National Bureau of Economic Research [Browse]
• Caceres Bravo, Mauricio M. [Browse]
• Hull, Peter [Browse]
• Starc, Amanda [Browse]

Series

• Working Paper Series (National Bureau of Economic Research) no. w27578. [More in this series]
• NBER working paper series no. w27578

Summary note

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.

Notes

July 2020.

Source of description

Print version record

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