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

Predicting risk selection following major changes in medicare

Contents:

Author Info

  • Steven D. Pizer
  • Austin B. Frakt

    (Health Care Financing & Economics, US Department of Veterans Affairs, Boston, MA, USA)

  • Roger Feldman

    (Health Policy and Management, School of Public Health, University of Minnesota, Minneapolis, MN, USA)

Registered author(s):

    Abstract

    The Medicare Modernization Act of 2003 created several new types of private insurance plans within Medicare, starting in 2006. Some of these plan types previously did not exist in the commercial market and there was great uncertainty about their prospects. In this paper, we show that statistical models and historical data from the Medicare Current Beneficiary Survey can be used to predict the experience of new plan types with reasonable accuracy. This lays the foundation for the analysis of program modifications currently under consideration. We predict market share, risk selection, and stability for the most prominent new plan type, the stand-alone Medicare prescription drug plan (PDP). First, we estimate a model of consumer choice across Medicare insurance plans available in the data. Next, we modify the data to include PDPs and use the model to predict the probability of enrollment for each beneficiary in each plan type. Finally, we calculate mean-adjusted actual spending by plan type. We predict that adverse selection into PDPs will be substantial, but that enrollment and premiums will be stable. Our predictions correspond well to actual experience in 2006. Copyright © 2007 John Wiley & Sons, Ltd.

    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://hdl.handle.net/10.1002/hec.1252
    File Function: Link to full text; subscription required
    Download Restriction: no

    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 17 (2008)
    Issue (Month): 4 ()
    Pages: 453-468

    as in new window
    Handle: RePEc:wly:hlthec:v:17:y:2008:i:4:p:453-468

    Contact details of provider:
    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

    Related research

    Keywords:

    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. Gary L. Hunt, 2000. "Alternative Nested Logit Model Structures and the Special Case of Partial Degeneracy," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 40(1), pages 89-113.
    2. Leonardo Leiderman & Assaf Razin, 1989. "Propogation of Shocks in a High-Inflation Economy: Israel, 1980-85," NBER Working Papers 2003, National Bureau of Economic Research, Inc.
    3. Coulson, N. Edward & Stuart, Bruce, 1992. "Persistence in the use of pharmaceuticals by the elderly : Evidence from annual claims," Journal of Health Economics, Elsevier, Elsevier, vol. 11(3), pages 315-328, October.
    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. Pizer, Steven D. & Prentice, Julia C., 2011. "Time is money: Outpatient waiting times and health insurance choices of elderly veterans in the United States," Journal of Health Economics, Elsevier, Elsevier, vol. 30(4), pages 626-636, July.
    2. Steven Pizer & Austin Frakt & Roger Feldman, 2009. "Nothing for something? Estimating cost and value for beneficiaries from recent medicare spending increases on HMO payments and drug benefits," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 9(1), pages 59-81, March.
    3. Austin B. Frakt & Steven D. Pizer, 2010. "Beneficiary price sensitivity in the Medicare prescription drug plan market," Health Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(1), pages 88-100.

    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:wly:hlthec:v:17:y:2008:i:4:p:453-468. 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: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    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.