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Price and the health plan choices of retirees

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  • Buchmueller, Thomas

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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Suggested Citation

  • Buchmueller, Thomas, 2006. "Price and the health plan choices of retirees," Journal of Health Economics, Elsevier, vol. 25(1), pages 81-101, January.
    • Handle: RePEc:eee:jhecon:v:25:y:2006:i:1:p:81-101
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    Cited by:

    1. 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.
    2. Wuppermann, Amelie C. & Bauhoff, Sebastian & Grabka, Markus M., 2014. "The Price Sensitivity of Health Plan Choice: Evidence from Retirees in the German Social Health Insurance," Discussion Papers in Economics 21080, University of Munich, Department of Economics.
    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., vol. 21(7), pages 1039-1079.
    4. 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 Economics and Management, Springer, vol. 10(1), pages 43-60, March.
    5. Schmitz, Hendrik & Ziebarth, Nicolas R., 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice," Ruhr Economic Papers 304, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. de Freitas, Maurício Assuero Lima & Stamford da Silva, Alexandre, 2013. "The influence of the healthcare system on optimal economic growth," Economic Modelling, Elsevier, vol. 35(C), pages 734-742.
    7. Bunnings, C,; & Schmitz, H,; & Tauchmann, H,; & Ziebarth, N.R,;, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Health, Econometrics and Data Group (HEDG) Working Papers 15/02, HEDG, c/o Department of Economics, University of York.
    8. Keane, Michael & Stavrunova, Olena, 2016. "Adverse selection, moral hazard and the demand for Medigap insurance," Journal of Econometrics, Elsevier, vol. 190(1), pages 62-78.
    9. Rachel Kreier & Bhaswati Sengupta, 2015. "Income, Health, and the Value of Preserving Options," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(4), pages 431-448, December.
    10. Jonas Pendzialek & Dusan Simic & Stephanie Stock, 2016. "Differences in price elasticities of demand for health insurance: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 5-21, January.
    11. Michiel Bijlsma & Jan Boone & Gijsbert Zwart, 2014. "Competition leverage: how the demand side affects optimal risk adjustment," RAND Journal of Economics, RAND Corporation, vol. 45(4), pages 792-815, December.
    12. Florian Heiss & Daniel McFadden & Joachim Winter, 2008. "Mind the Gap! Consumer Perceptions and Choices," MEA discussion paper series 08156, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    13. Florian Heiss & Daniel McFadden & Joachim Winter, 2010. "Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans," NBER Chapters, in: Research Findings in the Economics of Aging, pages 413-481, National Bureau of Economic Research, Inc.
    14. Hendrik Schmitz & Nicolas R. Ziebarth, 2011. "In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of," Ruhr Economic Papers 0304, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. 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.
    16. Westerhout, Ed & Folmer, Kees, 2018. "The Effects of Capping Co-Insurance Payments," Discussion Paper 2018-050, Tilburg University, Center for Economic Research.
    17. Itzhak Zilcha & Nancy Schneier, 2012. "Out‐of‐Pocket Health Expenditures: A Suggested Role for Social Security," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 15(2), pages 153-164, September.
    18. Christian Bünnings & Hendrik Schmitz & Harald Tauchmann & Nicolas R. Ziebarth, 2015. "How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality," Ruhr Economic Papers 0545, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    19. Tamara Bischof & Michael Gerfin & Tobias Mueller, 2021. "Attention Please! Health Plan Choice and (In-)Attention," Diskussionsschriften dp2111, Universitaet Bern, Departement Volkswirtschaft.
    20. Thomas C. Buchmueller & Kyle Grazier & Richard A. Hirth & Edward N. Okeke, 2013. "The Price Sensitivity Of Medicare Beneficiaries: A Regression Discontinuity Approach," Health Economics, John Wiley & Sons, Ltd., vol. 22(1), pages 35-51, January.
    21. Gerard J. Wedig, 2013. "The Value Of Consumer Choice And The Decline In Hmo Enrollments," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 1066-1086, January.
    22. Keane, Michael & Stavrunova, Olena, 2016. "Adverse selection, moral hazard and the demand for Medigap insurance," Journal of Econometrics, Elsevier, vol. 190(1), pages 62-78.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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