Working Paper: NBER ID: w11395
Authors: 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.
Keywords: No keywords provided
JEL Codes: I11; D12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher out-of-pocket premiums (G52) | Decreased probability of retirees selecting a particular health plan (J26) |
| Increased premiums (G52) | Decreased likelihood of choosing a specific health plan (G52) |
| 5% increase in premiums (G52) | 0.02 to 0.08 reduction in market share (L19) |
| Higher premiums (G52) | Less price sensitivity among retirees (J26) |
| Price effects are more pronounced for single retirees (J26) | More sensitivity to price changes (D11) |