Spot price biases in non-linear health insurance contracts

Simonsen, Marianne; Skipper, Lars; Skipper, Niels; Christensen, Anne Illemann

doi:10.1016/j.jpubeco.2021.104508

Cited by 7 publications

(1 citation statement)

References 19 publications

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“…Simonsen et al (2021) find that Danish drug consumers greatly increase spending both in anticipation of a national coverage reform that increased spot prices (but not expected average end‐of‐year prices) and in anticipation of a coverage year reset.Aron‐Dine et al (2015) exploit random variation in time to coverage reset, finding that consumers react to expected end‐of‐year prices, rather than just the spot price. Cabral (2016) finds that private insurance holders strategically delay dental care after spending the maximum covered amount, again exploiting a nonlinear price schedule, but in the opposite direction.…”

Section: Introductionmentioning

confidence: 99%

Correcting for transitory effects in RCTs: Evidence from the RAND Health Insurance Experiment

Abadi¹,

Devereux

Omran

2023

Canadian J of Economics

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Temporary randomized controlled trials are susceptible to transitory effects that would not result from a permanent treatment. We find a large and statistically significant “deadline effect”—a surge in spending in the final treatment year—in the RAND Health Insurance Experiment, identified by random allocation to three‐ or five‐year enrolment terms. Participants facing lower coinsurance rates show larger spending surges. Partialing out the price–deadline interaction reduces in magnitude estimates of the permanent price elasticity of drug spending (and in some specifications of outpatient and supplies spending). This implies higher optimal coinsurance rates and illustrates the importance of experimental design to identifying parameters of interest in randomized controlled trials.

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Section: Introductionmentioning

confidence: 99%