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Open enrollment periods and plan choices

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  • Francesco Decarolis
  • Andrea Guglielmo
  • Clavin Luscombe

Abstract

Open enrollment periods are pervasively used in insurance markets to limit adverse selection risks resulting when enrollees can switch plans at will. We exploit a change in the open enrollment rules of Medicare Advantage to analyze how beneficiaries responded to the option of switching to a 5‐star‐rated plan at anytime, in a setting where insurers adjusted premiums and benefit design to counterbalance the increased selection risk. We present three findings: Within‐year switches to 5‐star plans increase by 7–16%; demand for 5‐star plans across the years does not decline; and the enrollees who switch to a 5‐star plan during the year are in better health status than those who do not switch.

Suggested Citation

  • Francesco Decarolis & Andrea Guglielmo & Clavin Luscombe, 2020. "Open enrollment periods and plan choices," Health Economics, John Wiley & Sons, Ltd., vol. 29(7), pages 733-747, July.
  • Handle: RePEc:wly:hlthec:v:29:y:2020:i:7:p:733-747
    DOI: 10.1002/hec.4014
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 15th June 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-06-15 11:00:19

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    1. Geruso, Michael & Layton, Timothy J. & McCormack, Grace & Shepard, Mark, 2019. "The Two Margin Problem in Insurance Markets," Working Paper Series rwp19-035, Harvard University, John F. Kennedy School of Government.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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