IDEAS home Printed from https://ideas.repec.org/a/bla/jrinsu/v88y2021i2p413-427.html
   My bibliography  Save this article

Did Marketplace coverage really offer financial protection? Financial gains from the Affordable Care Act's private insurance policies among the previously uninsured

Author

Listed:
  • Naomi Zewde

Abstract

While the Affordable Care Act successfully expanded health insurance access, the law's private insurance component drew far fewer participants than projected. This study investigates the attractiveness of Marketplace insurance relative to uncompensated care provisions for those who remain uninsured. Using restricted‐access Medical Expenditure Panel Survey data, I find that for one in four previously uninsured consumers, bankruptcy costs less than meeting the deductible of the subsidized benchmark policy. Marketplace insurance reduces spending in only the top 3% most catastrophic potential scenarios these consumers face, on average. Net financial gain is more common among individuals in poor health (11% vs. 1%) or with assets to protect (3% vs.

Suggested Citation

  • Naomi Zewde, 2021. "Did Marketplace coverage really offer financial protection? Financial gains from the Affordable Care Act's private insurance policies among the previously uninsured," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 88(2), pages 413-427, June.
    • Handle: RePEc:bla:jrinsu:v:88:y:2021:i:2:p:413-427
    DOI: 10.1111/jori.12325
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jori.12325
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jori.12325?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Dana P. Goldman & Kip Hagopian, 2018. "It Is Time For Universal Coverage Without Breaking The Bank," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 37(1), pages 182-188, January.
    2. Jonathan Gruber, 2008. "Covering the Uninsured in the United States," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 571-606, September.
    3. Feng Gu & John Q. Li, 2012. "Insider Trading and Corporate Information Transparency," The Financial Review, Eastern Finance Association, vol. 47(4), pages 645-664, November.
    4. repec:mpr:mprres:6204 is not listed on IDEAS
    5. Manning, Willard G. & Basu, Anirban & Mullahy, John, 2005. "Generalized modeling approaches to risk adjustment of skewed outcomes data," Journal of Health Economics, Elsevier, vol. 24(3), pages 465-488, May.
    6. Jonathan Hartley, 2012. "Health Care Reform and Health Care Stocks: Evidence from the Supreme Court Ruling," Working Papers 2012-009, Becker Friedman Institute for Research In Economics.
    7. Neale Mahoney, 2015. "Bankruptcy as Implicit Health Insurance," American Economic Review, American Economic Association, vol. 105(2), pages 710-746, February.
    8. Meier, Sarah K., 2016. "Examining risk classification strategies for the development of a measure of medical care economic risk in the United States," Journal of Economic and Social Measurement, IOS Press, issue 3, pages 289-305.
    9. Mark Pauly & Adam Leive & Scott Harrington, 2020. "Losses (and Gains) from Health Reform for Non‐Medicaid Uninsureds," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 87(1), pages 41-66, March.
    10. Thomas R. Oliver, 1999. "The dilemmas of incrementalism: Logical and political constraints in the design of health insurance reforms," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(4), pages 652-683.
    11. Benjamin R. Handel, 2013. "Adverse Selection and Inertia in Health Insurance Markets: When Nudging Hurts," American Economic Review, American Economic Association, vol. 103(7), pages 2643-2682, December.
    12. Mark Pauly & Adam Leive & Scott Harrington, 2015. "The Price of Responsibility: The Impact of Health Reform on Non-Poor Uninsureds," NBER Working Papers 21565, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charles E. Phelps, 2023. "Optimal health insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(1), pages 213-241, March.
    2. Si Shi & Yawen Jiang, 2022. "Does supplemental private health insurance incentivize household risky financial asset investment? Evidence from the China Household Financial Survey," International Journal of Health Economics and Management, Springer, vol. 22(4), pages 369-421, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naomi Zewde, 2020. "The individual welfare effects of the Affordable Care Act for previously uninsured adults," International Journal of Health Economics and Management, Springer, vol. 20(2), pages 121-143, June.
    2. Jaffe, Sonia & Shepard, Mark, 2017. "Price-Linked Subsidies and Health Insurance Markups," Working Paper Series rwp17-002, Harvard University, John F. Kennedy School of Government.
    3. Sonia P. Jaffe & Mark Shepard, 2017. "Price-Linked Subsidies and Imperfect Competition in Health Insurance," NBER Working Papers 23104, National Bureau of Economic Research, Inc.
    4. Kendra Marcoux & Katherine R. H. Wagner, 2023. "Fifty Years of U.S. Natural Disaster Insurance Policy," CESifo Working Paper Series 10431, CESifo.
    5. Tal Gross & Timothy J. Layton & Daniel Prinz, 2022. "The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments," American Economic Review: Insights, American Economic Association, vol. 4(2), pages 175-190, June.
    6. Pietro Tebaldi & Alexander Torgovitsky & Hanbin Yang, 2023. "Nonparametric Estimates of Demand in the California Health Insurance Exchange," Econometrica, Econometric Society, vol. 91(1), pages 107-146, January.
    7. Chaoran Chen & Zhigang Feng & Jiaying Gu, 2022. "Health, Health Insurance, and Inequality," Working Papers tecipa-730, University of Toronto, Department of Economics.
    8. Kurt Lavetti & Thomas DeLeire & Nicolas R. Ziebarth, 2023. "How do low‐income enrollees in the Affordable Care Act marketplaces respond to cost‐sharing?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(1), pages 155-183, March.
    9. Gilad Sorek & David Benjamin, 2016. "Health insurance mandates in a model with consumer bankruptcy," Journal of Regulatory Economics, Springer, vol. 50(2), pages 233-250, October.
    10. Julie Shi, 2017. "Efficiency in Plan Choice with Risk Adjustment and Risk-Based Pricing in Health Insurance Exchanges," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 79-113, January.
    11. Benjamin R. Handel & Igal Hendel & Michael D. Whinston, 2017. "The Welfare Effects of Long-Term Health Insurance Contracts," NBER Working Papers 23624, National Bureau of Economic Research, Inc.
    12. Amy Finkelstein & Nathaniel Hendren & Mark Shepard, 2017. "Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts," NBER Working Papers 23668, National Bureau of Economic Research, Inc.
    13. Gilad Sorek & T. Randolph Beard, 2019. "Background Risk and Insurance Take-up under Limited Liability," Auburn Economics Working Paper Series auwp2019-05, Department of Economics, Auburn University.
    14. Partha Deb & Pravin K. Trivedi & David M. Zimmer, 2014. "Cost‐Offsets Of Prescription Drug Expenditures: Data Analysis Via A Copula‐Based Bivariate Dynamic Hurdle Model," Health Economics, John Wiley & Sons, Ltd., vol. 23(10), pages 1242-1259, October.
    15. David J. G. Slusky & Donna K. Ginther, 2021. "Did Medicaid expansion reduce medical divorce?," Review of Economics of the Household, Springer, vol. 19(4), pages 1139-1174, December.
    16. Banerjee, Snehal & Green, Brett, 2015. "Signal or noise? Uncertainty and learning about whether other traders are informed," Journal of Financial Economics, Elsevier, vol. 117(2), pages 398-423.
    17. Johannes Johnen, 2019. "Automatic‐renewal contracts with heterogeneous consumer inertia," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(4), pages 765-786, November.
    18. Pilny, Adam & Wübker, Ansgar & Ziebarth, Nicolas R., 2017. "Introducing risk adjustment and free health plan choice in employer-based health insurance: Evidence from Germany," Journal of Health Economics, Elsevier, vol. 56(C), pages 330-351.
    19. Pietro Tebaldi, 2015. "Estimating Equilibrium in Health Insurance Exchanges: Analysis of the Californian Market under the ACA," Discussion Papers 15-012, Stanford Institute for Economic Policy Research.
    20. James Bailey, 2017. "Health insurance and the supply of entrepreneurs: new evidence from the affordable care act," Small Business Economics, Springer, vol. 49(3), pages 627-646, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jrinsu:v:88:y:2021:i:2:p:413-427. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ariaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.