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Extrapolation using Selection and Moral Hazard Heterogeneity from within the Oregon Health Insurance Experiment

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Abstract

I aim to shed light on why emergency room (ER) utilization increased following the Oregon Health Insurance Experiment but decreased following a Massachusetts policy. To do so, I unite the literatures on insurance and treatment effects. Under an MTE model that assumes no more than the LATE assumptions, comparisons across always takers, compliers, and never takers can inform the impact of polices that expand and contract coverage. Starting from the Oregon experiment as the "gold standard," I make comparisons within Oregon and extrapolate my findings to Massachusetts. Within Oregon, I find adverse selection and heterogeneous moral hazard. Although previous enrollees increased their ER utilization, evidence suggests that subsequent enrollees will be healthier, and they will decrease their ER utilization. Accordingly, I can reconcile the Oregon and Massachusetts results because the Massachusetts policy expanded coverage from a higher baseline, and new enrollees reported better health.

Suggested Citation

  • Amanda E. Kowalski, 2018. "Extrapolation using Selection and Moral Hazard Heterogeneity from within the Oregon Health Insurance Experiment," Cowles Foundation Discussion Papers 2135, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2135
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    References listed on IDEAS

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    Cited by:

    1. Vitor Possebom, 2019. "Sharp Bounds for the Marginal Treatment Effect with Sample Selection," Papers 1904.08522, arXiv.org.
    2. Biroli, Pietro & Zwyssig, Laura, 2021. "Moral Hazard Heterogeneity: Genes and Health Insurance Influence Smoking after a Health Shock," IZA Discussion Papers 14176, Institute of Labor Economics (IZA).
    3. Paul R Shafer & Stacie B Dusetzina & Lindsay M Sabik & Timothy F Platts-Mills & Sally C Stearns & Justin G Trogdon, 2020. "Insurance instability and use of emergency and office-based care after gaining coverage: An observational cohort study," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-12, September.
    4. Michael R.M. Abrigo & Timothy J. Halliday & Teresa Molina, 2022. "Expanding health insurance for the elderly of the Philippines," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(3), pages 500-520, April.

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    More about this item

    Keywords

    Compliers; Marginal treatment effect; Massachusetts health reform; Program evaluation; Treated outcome test; Untreated outcome test;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H4 - Public Economics - - Publicly Provided Goods
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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