Advanced Search
MyIDEAS: Login to save this article or follow this journal

Quantitative Analysis of Health Insurance Reform: Separating Regulation from Redistribution

Contents:

Author Info

  • Svetlana Pashchenko

    (Uppsala University)

  • Ponpoje Porapakkarm

    (University of Macau)

Abstract

Two key components of the recent U.S. health reform are a new regulation of the individual health insurance market and an increase in income redistribution in the economy. Which component contributes more to the welfare outcome of the reform? We address this question by constructing a general equilibrium life cycle model that incorporates both medical expenses and labor income risks. We replicate the key features of the current health insurance system in the U.S. and calibrate the model using the Medical Expenditures Panel Survey dataset. We find that the reform decreases the number of uninsured more than twice and generates substantial welfare gains. These welfare gains mostly come from the redistributive measures embedded in the reform, rather than from the regulatory changes. (Copyright: Elsevier)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1016/j.red.2012.09.002
Download Restriction: Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 16 (2013)
Issue (Month): 3 (July)
Pages: 383-404

as in new window
Handle: RePEc:red:issued:11-70

Contact details of provider:
Postal: Review of Economic Dynamics Academic Press Editorial Office 525 "B" Street, Suite 1900 San Diego, CA 92101
Fax: 1-314-444-8731
Email:
Web page: http://www.EconomicDynamics.org/review.htm
More information through EDIRC

Order Information:
Email:
Web: http://www.EconomicDynamics.org/RED17.htm

Related research

Keywords: Health insurance; Health reform; Risk sharing; General equilibrium;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Chung Tran & Juergen Jung, 2011. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," ANU Working Papers in Economics and Econometrics, Australian National University, College of Business and Economics, School of Economics 2011-539, Australian National University, College of Business and Economics, School of Economics.
  2. Elena Capatina, 2012. "Life Cycle Effects of Health Risk," Working Papers, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales 201216, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales.
  3. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2008. "The Macroeconomic Implications of Rising Wage Inequality in the United States," NBER Working Papers 14052, National Bureau of Economic Research, Inc.
  4. Iourii Manovskii & Bjoern Bruegemann, 2009. "Fragility: A Quantitative Analysis of the US Health Insurance System," 2009 Meeting Papers, Society for Economic Dynamics 1246, Society for Economic Dynamics.
  5. Storesletten, Kjetil & Telmer, Chris & Yaron, Amir, 2002. "Consumption and Risk Sharing Over the Life Cycle," Seminar Papers, Stockholm University, Institute for International Economic Studies 702, Stockholm University, Institute for International Economic Studies.
  6. Imrohoruglu, Ayse, 1989. "Cost of Business Cycles with Indivisibilities and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 97(6), pages 1364-83, December.
  7. Conesa, Juan Carlos & Krüger, Dirk, 2005. "On the Optimal Progressivity of the Income Tax Code," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5040, C.E.P.R. Discussion Papers.
  8. Mariacristina De Nardi & Eric French & John Bailey Jones, 2009. "Why do the Elderly Save? The Role of Medical Expenses," NBER Working Papers 15149, National Bureau of Economic Research, Inc.
  9. Hansen, Gary D. & Hsu, Minchung & Lee, Junsang, 2014. "Health insurance reform: The impact of a Medicare buy-in," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 45(C), pages 315-329.
  10. Karen A. Kopecky & Tatyana Koreshkova, 2010. "The impact of medical and nursing home expenses and social insurance," Working Paper, Federal Reserve Bank of Atlanta 2010-19, Federal Reserve Bank of Atlanta.
  11. Gruber, Jonathan & McKnight, Robin, 2003. "Why did employee health insurance contributions rise?," Journal of Health Economics, Elsevier, Elsevier, vol. 22(6), pages 1085-1104, November.
  12. Gouveia, Miguel & Strauss, Robert P., 1994. "Effective Federal Individual Tax Functions: An Exploratory Empirical Analysis," National Tax Journal, National Tax Association, vol. 47(2), pages 317-39, June.
  13. Tatyana Koreshkova & Karen A. Kopecky, 2009. "The Impact of Medical and Nursing Home Expenses and Social Insurance Policies on Savings and Inequality," 2009 Meeting Papers, Society for Economic Dynamics 46, Society for Economic Dynamics.
  14. Cutler, David M & Gruber, Jonathan, 1996. "Does Public Insurance Crowd Out Private Insurance?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 111(2), pages 391-430, May.
  15. Kolstad, Jonathan T. & Kowalski, Amanda E., 2012. "The impact of health care reform on hospital and preventive care: Evidence from Massachusetts," Journal of Public Economics, Elsevier, Elsevier, vol. 96(11), pages 909-929.
  16. Pashchenko, Svetlana & Porapakkarm, Ponpoje, 2010. "Quantitative Analysis of Health Insurance Reform: Separating Community Rating from Income Redistribution," MPRA Paper 26158, University Library of Munich, Germany.
  17. Jeffrey Clemens, 2014. "Regulatory Redistribution in the Market for Health Insurance," NBER Working Papers 19904, National Bureau of Economic Research, Inc.
  18. Selahattin Imrohoroglu & Sagiri Kitao, 2012. "Social Security Reforms: Benefit Claiming, Labor Force Participation, and Long-Run Sustainability," American Economic Journal: Macroeconomics, American Economic Association, American Economic Association, vol. 4(3), pages 96-127, July.
  19. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  20. Karsten Jeske & Sagiri Kitao, 2007. "U.S. tax policy and health insurance demand: can a regressive policy improve welfare?," Working Paper, Federal Reserve Bank of Atlanta 2007-13, Federal Reserve Bank of Atlanta.
  21. S. Rao Aiyagari, 1993. "Uninsured idiosyncratic risk and aggregate saving," Working Papers, Federal Reserve Bank of Minneapolis 502, Federal Reserve Bank of Minneapolis.
  22. Zhigang Feng, 2009. "Macroeconomic Consequences of Alternative Reforms to the Health Insurance System in the U.S," Working Papers, University of Miami, Department of Economics 0908, University of Miami, Department of Economics.
  23. Hubert P. Janicki, 2011. "Distributional Effects of Public Health Insurance Reform," 2011 Meeting Papers, Society for Economic Dynamics 423, Society for Economic Dynamics.
  24. Tauchen, George & Hussey, Robert, 1991. "Quadrature-Based Methods for Obtaining Approximate Solutions to Nonlinear Asset Pricing Models," Econometrica, Econometric Society, Econometric Society, vol. 59(2), pages 371-96, March.
  25. Young, Eric R., 2010. "Solving the incomplete markets model with aggregate uncertainty using the Krusell-Smith algorithm and non-stochastic simulations," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 34(1), pages 36-41, January.
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 in new window

Cited by:
  1. Mariacristina De Nardi & Eric French & John Bailey Jones, 2012. "Medicaid insurance in old age," Working Paper Series, Federal Reserve Bank of Chicago WP-2012-13, Federal Reserve Bank of Chicago.
  2. Chung Tran & Juergen Jung, 2011. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," ANU Working Papers in Economics and Econometrics, Australian National University, College of Business and Economics, School of Economics 2011-539, Australian National University, College of Business and Economics, School of Economics.
  3. Naoki Aizawa & Hanming Fang, 2013. "Equilibrium Labor Market Search and Health Insurance Reform," NBER Working Papers 18698, National Bureau of Economic Research, Inc.
  4. Naoki Aizawa & Hanming Fang, 2013. "Equilibrium Labor Market Search and Health Insurance Reform," PIER Working Paper Archive 13-002, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  5. Cole, Harold L. & Kim, Soojin & Krueger, Dirk, 2012. "Analyzing the effects of insuring health risks: On the trade-off between short run insurance benefits vs. long run incentive costs," CFS Working Paper Series, Center for Financial Studies (CFS) 2012/18, Center for Financial Studies (CFS).
  6. Ponpoje (Poe) Porapakkarm & Svetlana Pashchenko, 2013. "Cross-subsidization in employer-based health insurance and the effects of tax subsidy reform," 2013 Meeting Papers, Society for Economic Dynamics 1086, Society for Economic Dynamics.
  7. Jorge Barro & Stephen Barnes, . "Federal Subsidization and Optimal State Medicaid Provision," Departmental Working Papers, Department of Economics, Louisiana State University 2014-05, Department of Economics, Louisiana State University.
  8. Hansen, Gary D. & Hsu, Minchung & Lee, Junsang, 2014. "Health insurance reform: The impact of a Medicare buy-in," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 45(C), pages 315-329.
  9. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages: An Equilibrium Model of Workers' Compensation and Health Care Policies," PIER Working Paper Archive 13-019, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
  10. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages," Working Papers, Becker Friedman Institute for Research In Economics 2013-007, Becker Friedman Institute for Research In Economics.
  11. Rong Hai, 2013. "The Determinants of Rising Inequality in Health Insurance and Wages, Second Version," PIER Working Paper Archive 13-071, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 21 Dec 2013.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:red:issued:11-70. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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