X hits on this document

464 views

0 shares

0 downloads

0 comments

33 / 98

respect to the size of the HRA (0.09). The concluded that consumers may be more sensitive to

changes

in

coinsurance

than

to

changes

in

the

doughnut

hole

structure.

Moreover,

they

concluded that tax credits targeted to Health Savings Accounts (HSAs) may be effective in

increasing the take-up of insurance among the uninsured in general, but much less effective

among those with lower incomes.

2.

Subpopulation Differences

Large differences in the price elasticity of plan switching have been associated with

differences

in

health

status,

age,

and

job

tenure.

For

example,

the

price

elasticity

among

younger, recently hired employees who are in good health—and presumed to face the lowest

non-price switching costs, such as quality uncertainty and provider change—are two to four

times larger than those estimated for older, incumbent, and less healthy workers (Royalty and

Solomon 1999; Strombom et al. 2002). Single employees are more likely to respond to premium

increases by dropping coverage altogether, whereas families tend to switch to another plan

(Goldman et al. 2004). Everything else being equal, the tax exemption of expenditures for

employer-based health insurance may explain some of these differences, especially when family

income is not observable.7

Regarding the choice of CDHP in a multiplan, multiproduct setting, Parente et al. (2004)

found that the CDHP attracted higher-income employees and those who found unrestricted

choice among providers more appealing—not necessarily young and healthy employees or

families. Among employees or families with chronic conditions, the price elasticity of demand

for the CDHP was greater than among those without a chronic condition.

7 Dowd et al. (2001) observed that the tax exemption of premiums substantially reduces price responsiveness in choice of health plans, especially at higher incomes (and higher marginal tax rates).

23

Document info
Document views464
Page views465
Page last viewedThu Dec 08 19:38:32 UTC 2016
Pages98
Paragraphs2978
Words29067

Comments