Researchers from Columbia University Report Details of New Studies and Findings in the Area of Managed Care (Nonparametric Estimates of Demand In the California Health Insurance Exchange): Managed Care

2023 MAY 26 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- Investigators publish new report on Managed Care. According to news reporting out of New York City, New York, by NewsRx editors, research stated, “We develop a new nonparametric approach for discrete choice and use it to analyze the demand for health insurance in the California Affordable Care Act marketplace. The model allows for endogenous prices and instrumental variables, while avoiding parametric functional form assumptions about the unobserved components of utility.”

Financial supporters for this research include Becker Friedman Institute Health Economics Initiative, National Science Foundation (NSF).

Our news journalists obtained a quote from the research from Columbia University, “We use the approach to estimate bounds on the effects of changing premiums or subsidies on coverage choices, consumer surplus, and government spending on subsidies. We find that a $10 decrease in monthly premium subsidies would cause a decline of between 1.8% and 6.7% in the proportion of subsidized adults with coverage. The reduction in total annual consumer surplus would be between $62 and $74 million, while the savings in yearly subsidy outlays would be between $207 and $602 million. We estimate the demand impacts of linking subsidies to age, finding that shifting subsidies from older to younger buyers would increase average consumer surplus, with potentially large impacts on enrollment. We also estimate the consumer surplus impact of removing the highly-subsidized plans in the Silver metal tier, where we find that a nonparametric model is consistent with a wide range of possibilities.”

According to the news editors, the research concluded: “We find that comparable mixed logit models tend to yield price sensitivity estimates toward the lower end of the nonparametric bounds, while producing consumer surplus impacts that can be both higher and lower than the nonparametric bounds depending on the specification of random coefficients.”

This research has been peer-reviewed.

For more information on this research see: Nonparametric Estimates of Demand In the California Health Insurance Exchange. Econometrica, 2023;91(1):107-146. Econometrica can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA. (Wiley-Blackwell - http://www.wiley.com/; Econometrica - http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1468-0262)

Our news journalists report that additional information may be obtained by contacting Pietro Tebaldi, Columbia University, Dept. of Economics, New York, NY 10027, United States. Additional authors for this research include Alexander Torgovitsky and Hanbin Yang.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.3982/ECTA17215. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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