The interaction of partial public insurance programs and residual private insurance markets: evidence from the US Medicare program.
A ubiquitous form of government intervention in insurance markets is to provide compulsory, but partial, public insurance coverage and to allow voluntary purchases of supplementary private insurance. This paper investigates the effects of such programs on insurance coverage for the risks not covered by the public program, using the example of the US Medicare program. I find that Medicare does not have substantial effects-in either direction-on coverage in residual private insurance markets. In particular, there is no evidence that Medicare is associated with reductions in private insurance coverage for prescription drug expenditures, an expenditure risk not covered by Medicare. Medicare is, however, associated with a shift in the source of prescription drug coverage, from employer-provided coverage to Medicare HMOs.
Finkelstein
Amy
A
Harvard University and National Bureau of Economic Research, 1050 Massachusetts Ave, 3rd Floor, Cambridge, MA 02138, USA. afinkels@nber.org
D000368:Aged; D005260:Female; D006264:Health Benefit Plans, Employee / Q000706:statistics & numerical data; D019981:Health Care Sector / Q000639:trends*; D006279:Health Maintenance Organizations / Q000191:economics / Q000706:statistics & numerical data; D006801:Humans; D015273:Insurance Selection Bias; D007353:Insurance, Long-Term Care / Q000706:statistics & numerical data; D017054:Insurance, Medigap / Q000706:statistics & numerical data*; D007356:Insurance, Pharmaceutical Services / Q000706:statistics & numerical data; D008297:Male; D006278:Medicare / Q000706:statistics & numerical data*; D008875:Middle Aged; D017149:Private Sector; D017150:Public Sector; D012179:Retirement / Q000191:economics*; D012306:Risk; D014481:United States