Findings in the Area of Political Economics Reported from Bocconi University (Subsidy Design In Privately Provided Social Insurance: Lessons From Medicare Part D)

Health Policy and Law Daily

2020 OCT 07 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- Investigators publish new report on Economics - Political Economics. According to news reporting out of Milan, Italy, by NewsRx editors, research stated, “The efficiency of publicly subsidized, privately provisioned social insurance programs depends on the interaction between strategic insurers and the subsidy mechanism.”

Financial supporters for this research include Sloan Foundation, National Science Foundation, National Institute on Aging.

Our news journalists obtained a quote from the research from Bocconi University, “We study this interaction in the context of Medicare’s prescription drug coverage program. We find that the observed mechanism is successful in keeping ‘raise-the-subsidy’ incentives relatively low, acts much like a flat voucher, and obtains a level of welfare close to that for the optimal voucher.”

According to the news editors, the research concluded: “Across a range of counterfactuals, we find that more efficient subsidy mechanisms share three features: they retain the marginal elasticity of demand, limit the exercise of market power, and preserve the link between prices and marginal costs.”

For more information on this research see: Subsidy Design In Privately Provided Social Insurance: Lessons From Medicare Part D. Journal of Political Economy, 2020;128(5):1712-1752. Journal of Political Economy can be contacted at: Univ Chicago Press, 1427 E 60TH St, Chicago, IL 60637-2954, USA. (University of Chicago Press - press.uchicago.edu; Journal of Political Economy - /ucp/journals/journal/jpe.html)

Our news journalists report that additional information may be obtained by contacting Francesco Decarolis, Bocconi University, Milan, Italy. Additional authors for this research include Maria Polyakova and Stephen P. Ryan.