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Do individuals respond to cost-sharing subsidies in their selections of marketplace health insurance plans?

The Affordable Care Act (ACA) provides assistance to low-income consumers through both premium subsidies and cost-sharing reductions (CSRs). Low-income consumers' lack of health insurance literacy or information regarding CSRs may lead them to not take-up CSR benefits for which they are eligible. We...

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Published in:Journal of Health Economics Vol. 56; pp. 71 - 87
Main Authors: DeLeire, Thomas, Chappel, Andre, Finegold, Kenneth, Gee, Emily
Format: Journal Article
Published: Elsevier B.V. Dec2017
Online Access:View this record in EBSCOhost
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      dt: Dec2017
      vid: 56
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      pub: Elsevier B.V.
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        NLM28982036
        10.1016/j.jhealeco.2017.09.008
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        atl: Do individuals respond to cost-sharing subsidies in their selections of marketplace health insurance plans?
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        au:
          DeLeire, Thomas
          Chappel, Andre
          Finegold, Kenneth
          Gee, Emily
        affil: Georgetown University and National Bureau of Economic Research, United States
      sug:
        subj:
          Decision Making
          Insurance
          Health Insurance Exchanges
          Male
          Female
          Regression
          Poverty
          Insurance Coverage Economics
          Resource Databases
          Patient Protection and Affordable Care Act
          United States
          Male
          Female
      ab: The Affordable Care Act (ACA) provides assistance to low-income consumers through both premium subsidies and cost-sharing reductions (CSRs). Low-income consumers' lack of health insurance literacy or information regarding CSRs may lead them to not take-up CSR benefits for which they are eligible. We use administrative data from 2014 to 2016 on roughly 22 million health insurance plan choices of low-income individuals enrolled in ACA Marketplace coverage to assess whether they behave in a manner consistent with being aware of the availability of CSRs. We take advantage of discontinuous changes in the schedule of CSR benefits to show that consumers are highly sensitive to the value of CSRs when selecting insurance plans and that a very low percentage select dominated plans. These findings suggest that CSR subsidies are salient to consumers and that the program is well designed to account for any lack of health insurance literacy among the low-income population it serves.
      pubtype: Academic Journal
      doctype: Journal Article
      ougenre: Article
    language: English
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