title: The effects of retiree health insurance plan characteristics on retirees' choice and employers' costs.
abstract: To moderate the rate of growth of retiree health insurance costs, employers can modify plans and move retirees into less expensive plans. We examine policy modifications implemented by the North Carolina State Health Plan. We investigate whether incentives produce the desired plan elections and whether these changes, along with cost shifting, produce the expected reductions in cost growth. Using individual-level administrative data, along with aggregated data on expenditures for retirees, we estimate the effects of the introduction and subsequent repeal of a Comprehensive Wellness Initiative for non-Medicare eligible retirees, as well as increases in coinsurance and copayments and the introduction of a premium for all retirees. Over a third of non-Medicare retirees shifted into the least generous plan between June 2009 and December 2012. The level effects on annual costs and unfunded accrued liabilities were relatively modest, but growth rates were diminished. Increases in the retiree premiums reduced the state's projected costs.
authors.affiliation: Poole College of Management, North Carolina State University, USA.
authors.forename: Robert L
authors.initials: RL
authors.lastname: Clark
authors.affiliation: Department of Economics, North Carolina State University, USA. Electronic address: melinda_morrill@ncsu.edu.
authors.forename: Melinda Sandler
authors.initials: MS
authors.lastname: Morrill
authors.affiliation: Fiscal Research Division, North Carolina General Assembly, USA.
authors.forename: David
authors.initials: D
authors.lastname: Vanderweide
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D002755:Choice Behavior; D005260:Female; D006264:Health Benefit Plans, Employee / Q000458:organization & administration*; D006801:Humans; D008297:Male; D006278:Medicare / Q000706:statistics & numerical data; D008875:Middle Aged; D009657:North Carolina; D012179:Retirement; D014481:United States
keywords: Health insurance; Medical care; Plan choice; Retiree health insurance; Unfunded actuarially accrued liabilities; Wellness programs