title: The value of coverage in the medicare advantage insurance market.
abstract: This paper examines the impact of coverage on demand for health insurance in the Medicare Advantage (MA) insurance market. Estimating the effects of coverage on demand poses a challenge for researchers who must consider both the hundreds of benefits that affect out-of-pocket costs (OOPC) to consumers, but also the endogeneity of coverage. These problems are addressed in a discrete choice demand model by employing a unique measure of OOPC that considers a consumer's expected payments for a fixed bundle of health services and applying instrumental variable techniques to address potential endogeneity bias. The results of the demand model show that OOPC have a significant effect on consumer surplus and that not instrumenting for OOPC results in a significant underestimate of the value of coverage.
authors.affiliation: Bureau of Economic Analysis, U.S. Department of Commerce, 1441 L Street NW, Washington, DC 20230, United States. abe.dunn@bea.gov
authors.forename: Abe
authors.initials: A
authors.lastname: Dunn
mesh_terms: D000368:Aged; D002755:Choice Behavior; D005382:Financing, Personal / Q000706:statistics & numerical data*; D019981:Health Care Sector; D006301:Health Services Needs and Demand; D006801:Humans; D007342:Insurance Benefits; D019458:Insurance Coverage / Q000191:economics*; D020398:Medicare Part C / Q000191:economics*; D014481:United States