Working Paper: NBER ID: w28762
Authors: Betsy Q. Cliff; Sarah Miller; Jeffrey T. Kullgren; John Z. Ayanian; Richard Hirth
Abstract: Recent expansions of Medicaid eligibility have come with increased experimentation with enrollee cost-sharing. In this paper, we exploit a discontinuous premium increase at the federal poverty level in Michigan’s Medicaid expansion program to test low-income individuals’ sensitivity to premiums using linked enrollment and claims data. At the cutoff, average premiums increase by $3.15 and the probability of disenrollment increases by 2.3 percentage points. Increased disenrollment occurs among those with fewer documented medical needs at baseline, but not among those with greater medical needs. These results suggest healthier low-income individuals may be sensitive to even modest health insurance premiums, and that premiums may induce adverse selection in Medicaid plans.
Keywords: Medicaid; Adverse Selection; Health Insurance; Cost-Sharing
JEL Codes: I1; I12; I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increase in premiums (G52) | Disenrollment rates (I13) |
| Increase in premiums (G52) | Disenrollment rates among individuals with fewer medical needs (I13) |
| Increase in premiums (G52) | Disenrollment rates among individuals with above-median health spending or chronic disease claims (I13) |
| Fuzzy RD approach (C69) | Estimation of treatment effects (C22) |