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Price and the Health Plan Choices of Retirees

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  • Thomas C. Buchmueller

Abstract

This study analyzes health plan choices of retirees in an employer-sponsored health benefits program that resembles "premium support" models proposed for Medicare. In this program, out-of-pocket premiums depend on when an individual retired and his or her years of service as of that date. Since this price variation is exogenous to unobserved plan attributes and retiree characteristics, it possible to obtain unbiased premium elasticity estimates. The results indicate a significantly negative effect of premiums. The implied elasticities are at the low end of the range found in previous studies on active employees.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11395.

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Date of creation: Jun 2005
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Publication status: published as Buchmueller, Thomas. "Price And The Health Plan Choices Of Retirees," Journal of Health Economics, 2006, v25(1,Jan), 81-101.
Handle: RePEc:nbr:nberwo:11395

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Cited by:
  1. Bijlsma, Michiel & Boone, Jan & Zwart, Gijsbert, 2011. "Competition leverage: how the demand side affects optimal risk adjustment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8461, C.E.P.R. Discussion Papers.
  2. Michael P. Keane & Olean Stavrunova, 2014. "Adverse Selection, Moral Hazard and the Demand for Medigap Insurance," Economics Papers 2014-W02, Economics Group, Nuffield College, University of Oxford.
  3. Katherine Ho, 2006. "The welfare effects of restricted hospital choice in the US medical care market," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 21(7), pages 1039-1079.
  4. Florian Heiss & Daniel McFadden & Joachim Winter, 2008. "Mind the Gap! Consumer Perceptions and Choices," MEA discussion paper series, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy 08156, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  5. Rudy Douven & Marco Ligthart & H. Lieverdink & I. Vermeulen, 2007. "Measuring annual price elasticities in Dutch health insurance; a new method," CPB Discussion Paper 90, CPB Netherlands Bureau for Economic Policy Analysis.
  6. Hendrik Schmitz & Nicolas R. Ziebarth, 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0304, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Schmitz, Hendrik & Ziebarth, Nicolas R., 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice," IZA Discussion Papers 6241, Institute for the Study of Labor (IZA).
  8. Florian Heiss & Daniel McFadden & Joachim Winter, 2007. "Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans," NBER Working Papers 13627, National Bureau of Economic Research, Inc.
  9. de Freitas, Maurício Assuero Lima & Stamford da Silva, Alexandre, 2013. "The influence of the healthcare system on optimal economic growth," Economic Modelling, Elsevier, Elsevier, vol. 35(C), pages 734-742.
  10. Marco Varkevisser & Stéphanie Geest & Frederik Schut, 2010. "Assessing hospital competition when prices don’t matter to patients: the use of time-elasticities," International Journal of Health Care Finance and Economics, Springer, Springer, vol. 10(1), pages 43-60, March.

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