Findings from NBER in the Area of Health Insurance Described (Bunching at the kink: Implications for spending responses to health insurance contracts)

Managed Care Weekly Digest

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Investigators publish new report on Health Insurance. According to news reporting originating in Cambridge, Massachusetts, by NewsRx journalists, research stated, "A large literature in empirical public finance relies on 'bunching' to identify a behavioral response to non-linear incentives and to translate this response into an economic object to be used counterfactually."

The news reporters obtained a quote from the research from NBER, "We conduct this type of analysis in the context of prescription drug insurance for the elderly in Medicare Part D, where a kink in the individual's budget set generates substantial bunching in annual drug expenditure around the famous 'donut bile.' We show that different alternative economic models can match the basic bunching pattern, but have very different quantitative implications for the counterfactual spending response to alternative insurance contracts."

According to the news reporters, the research concluded: "These findings illustrate the importance of modeling choices in mapping a compelling reduced form pattern into an economic object of interest."

For more information on this research see: Bunching at the kink: Implications for spending responses to health insurance contracts. Journal of Public Economics, 2017;146():27-40. Journal of Public Economics can be contacted at: Elsevier Science Sa, PO Box 564, 1001 Lausanne, Switzerland. (Elsevier - www.elsevier.com; Journal of Public Economics - www.journals.elsevier.com/journal-of-public-economics/)

Our news correspondents report that additional information may be obtained by contacting L. Einav, NBER, Cambridge, MA 02138, United States. Additional authors for this research include A. Finkelstein and P. Schrimpf (see also Health Insurance).

Keywords for this news article include: Cambridge, Massachusetts, United States, North and Central America, Health Insurance, NBER.