TY  - JOUR
AU  - Hansen,Gary D.
AU  - Hsu,Minchung
AU  - Lee,Junsang
TI  - Health Insurance Reform: The Impact of a Medicare Buy-In
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18529
PY  - 2012
Y2  - November 2012
UR  - http://www.nber.org/papers/w18529
L1  - http://www.nber.org/papers/w18529.pdf
N1  - Author contact info:
Gary Hansen
UCLA
Department of Economics
8283 Bunche Hall
Box 951477
Los Angeles, CA 90095
Tel: 310/825-3847
Fax: 310/825-9528
E-Mail: ghansen@econ.ucla.edu

Minchung Hsu
National Graduate Institute for Policy Studies
7-22-1 Roppongi, Minato-ku
Tokyo 106-8677, Japan 
E-Mail: minchunghsu@grips.ac.jp

Junsang Lee
School of Economics
Sungkyunkwan University
Seoul, Korea
E-Mail: junsanglee@skku.edu
AB  - The steady state general equilibrium and welfare consequences of health insurance reform are evaluated in a calibrated life-cycle economy with incomplete markets and endogenous labor supply.  Individuals face uncertainty each period about their future health status, medical expenditures, labor productivity, access to employer provided group health insurance, and the length of their life.  In this environment, incomplete markets and adverse selection, which restricts the type of insurance contracts available in equilibrium, creates a potential role for health insurance reform. In particular, we consider a policy reform that would allow older workers (aged 55-64) to purchase insurance similar to Medicare coverage. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance.  Hence, we compare the equilibrium properties of the current insurance system with those that obtain with an optional buy-in subsidized by the government, as well as with several types of health insurance mandates.
ER  -