Full Citation

Title: How Do Supply-Side Regulations in the ACA Impact Market Outcomes? Evidence from California

Citation Type: Miscellaneous

Publication Year: 2017

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Abstract: This paper examines how two supply-side regulations–modified community rating and risk adjustment–impact the Affordable Care Act (ACA) exchange in California. Using data on individual-level choices and networking providers, I estimate a model of health insurance demand and supply incorporating heterogeneity in preferences, plan characteristics, and costs. The results indicate consumers in this market are highly price-sensitive, and margins are modest (between 3% and 8%). Without risk adjustment, modified community rating in the ACA would lead to a significant reduction in enrollment in desirable plans and in take-up overall. Risk adjustment under the ACA roughly restores relative shares across plans to what they would be without community rating. The reduction in overall take-up from community rating is not impacted by risk adjustment. An alternative risk adjustment method can increase enrollment by 2.6% and would have little impact on government spending. Other policies besides risk adjustment would be needed to address low take-up among price-sensitive, low-cost consumers under community rating.

Url: http://www.richarddomurat.com/uploads/1/0/9/9/109953487/domurat_jmp_201711.pdf

User Submitted?: No

Authors: Domurat, Richard

Publisher: UCLA

Data Collections: IPUMS USA

Topics: Health, Other

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