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Title: Demand for Health Insurance: Evidence from the California and Washington ACA Marketplaces

Citation Type: Miscellaneous

Publication Year: 2017

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Abstract: I estimate demand for health insurance using consumer-level data from the California and Washington ACA marketplaces. I use the demand estimates to simulate the impact of policies targeting adverse selection, including subsidies and the individual mandate. I find (1) high own-premium elasticities of -6.9 to -7.8, but low insurance coverage elasticities of -0.5 to -0.6; (2) minimal response to the mandate penalty amount, but significant response to the penaltys existence, suggesting consumers have a taste for compliance; (3) mandate repeal has minimal effect on consumer surplus because ACA subsidies already mitigate adverse selection by shielding most consumers from premium increases; and (4) mandate repeal reduces average annual consumer surplus by up to $1, 500 if consumers were exposed to premium increases under voucher-type systems, instead of ACA subsidies. The economic rationale for the mandate depends on the extent of adverse selection and the presence of other policies targeting selection.

Url: https://faculty.wharton.upenn.edu/wp-content/uploads/2017/02/ACA-Demand-Paper-2-20-2017.pdf

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Authors: Saltzman, Evan

Publisher: The Wharton School

Data Collections: IPUMS USA

Topics: Health, Other

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