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Modeling health insurance expansions: Effects of alternate approaches

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  • Dahlia K. Remler

    (Department of Health Policy and Management, Mailman School of Public Health, Columbia University)

  • Joshua Graff Zivin

    (Department of Health Policy and Management, Mailman School of Public Health, Columbia University)

  • Sherry A. Glied

    (Department of Health Policy and Management, Mailman School of Public Health, Columbia University)

Abstract

Estimates of the costs and consequences of many types of public policy proposals play an important role in the development and adoption of particular policy programs. Estimates of the same, or similar, policies that employ different modeling approaches can yield widely divergent results. Such divergence often undermines effective policymaking. These problems are particularly prominent for health insurance expansion programs. Concern focuses on predictions of the numbers of individuals who will be insured and the costs of the proposals. Several different simulation-modeling approaches are used to predict these effects, making the predictions difficult to compare. This paper categorizes and describes the different approaches used; explains the conceptual and theoretical relationships between the methods; demonstrates empirically an example of the (quite restrictive) conditions under which all approaches can yield quantitatively identical predictions; and empirically demonstrates conditions under which the approaches diverge and the quantitative extent of that divergence. All modeling approaches implicitly make assumptions about functional form that impose restrictions on unobservable heterogeneity. Those assumptions can dramatically affect the quantitative predictions made. © 2004 by the Association for Public Policy Analysis and Management.

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File URL: http://hdl.handle.net/10.1002/pam.20005
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 23 (2004)
Issue (Month): 2 ()
Pages: 291-313

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Handle: RePEc:wly:jpamgt:v:23:y:2004:i:2:p:291-313

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Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Sherry Glied & Tama Brooks, 1997. "The Market and the Estimators: Forecasting the Cost of Medicare Catastrophic Coverage," NBER Working Papers 6287, National Bureau of Economic Research, Inc.
  2. William N. Evans & Jeanne S. Ringel, 1997. "Can Higher Cigarette Taxes Improve Birth Outcomes?," NBER Working Papers 5998, National Bureau of Economic Research, Inc.
  3. Goldman Dana P & Joyce Geoffrey F & Malkin Jesse Dylan, 2002. "The Costs of A Medicare Prescription Drug Benefit," The B.E. Journal of Economic Analysis & Policy, De Gruyter, De Gruyter, vol. 2(1), pages 1-18, April.
  4. Derek Neal, 2002. "How Vouchers Could Change the Market for Education," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(4), pages 25-44, Fall.
  5. Henry J. Aaron, 2000. "Presidential address- Seeing through the fog," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 19(2), pages 193-206.
  6. Helen F. Ladd, 2002. "School Vouchers: A Critical View," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(4), pages 3-24, Fall.
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Cited by:
  1. Jonathan Gruber, 2004. "Tax Policy for Health Insurance," NBER Working Papers 10977, National Bureau of Economic Research, Inc.
  2. Greg Colman & Dahlia K. Remler, 2004. "Vertical Equity Consequences of Very High Cigarette Tax Increases: If the Poor are the Ones Smoking, How Could Cigarette Tax Increases be Progressive?," NBER Working Papers 10906, National Bureau of Economic Research, Inc.

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