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Selection Across U.S. Health Insurance Markets
Jonathan A. Holmes, University of California, Berkeley
Jeffrey Clemens, University of California, San Diego and NBER

Models of consumer choice and selection in health insurance markets typically focus on decisions within one market setting (e.g. the choice of plans offered by an employer). This paper focuses on selection and choice at the broader level of health care markets, comparing Medicaid, employer sponsored insurance, and insurance exchanges. Holmes studies cross-market adverse selection in the context of the Affordable Care Act, which simultaneously expanded Medicaid while creating health insurance exchanges. Comparing Medicaid expansion and non-expansion states, Holmes finds that the individual market in expansion stats has healthier enrollees, lower costs, and premiums which are 10% lower than in non-expansion states. Then, using variation in federal reinsurance payments as identification, Holmes finds that price increases on individual health insurance exchanges lead lower-income consumers to become uninsured, and higher income consumers switch to employer-sponsored coverage.

The Impact of Financial Assistance Programs on Health Care Utilization
Alyce S. Adams, Stanford University
Raymond Kluender, Harvard University
Neale Mahoney, Stanford University and NBER
Jinglin Wang, New York University
Francis Wong, NBER Postdoctoral Fellow
Wesley Yin, University of California, Los Angeles and NBER
Matthew J. Notowidigdo, University of Chicago and NBER

Most hospitals and managed care organizations have financial assistance programs that aim to reduce financial burdens and improve health care access for low-income patients. Adams, Kluender, Mahoney, Wang, Wong, and Yin use administrative data from Kaiser Permanente to study the effects of financial assistance on health care utilization. Using a regression discontinuity design based on an income threshold for program eligibility, Adams, Kluender, Mahoney, Wang, Wong, and Yin find that financial assistance significantly increases health care utilization initially, though effects dissipate three quarters after program receipt. Financial assistance also increases the detection of and medication refills for treatment-sensitive conditions, suggesting financial assistance may increase receipt of high-value care.


This paper was distributed as Working Paper 29227, where an updated version may be available.

Mental Health and Criminal Involvement: Evidence from Losing Medicaid Eligibility
Elisa Jacome, Stanford University
Andrew Goodman-Bacon, Federal Reserve Bank of Minneapolis and NBER

This paper explores whether access to mental healthcare can reduce criminal activity. Specifically, Jacome studies the effect of losing insurance coverage on low-income men's likelihood of incarceration using administrative data from South Carolina that has been linked across six state government agencies. Leveraging a discrete break in Medicaid coverage at age 19 and a difference-in-differences strategy, Jacome finds that men who lose access to Medicaid eligibility are 15% more likely to be incarcerated in the subsequent two years relative to a matched comparison group. The effects are concentrated among men with mental health histories, suggesting that losing access to mental healthcare plays an important role in explaining the observed rise in crime. By their 21st birthdays, men with mental health histories who lost Medicaid coverage are 22% more likely to have been incarcerated than the comparison group. Cost-benefit analyses show that expanding Medicaid eligibility to low-income young men is a cost-effective policy for reducing crime, especially relative to traditional approaches like increasing the severity of criminal sanctions. These findings have important implications for the design of criminal justice policies if low-income young men are more deterred from participating in illegal activity through the provision of healthcare than through harsher punishments.

I Wish I Were Born in Another Time: Unintended Consequences of Immigration Enforcement on Birth Outcomes
Hoa Vu, University of Wisconsin-Madison
Crystal Yang, Harvard University and NBER

This paper studies the effects of Secure Communities (SC), a wide-ranging immigration enforcement program, on infant health outcomes in the United States. Using administrative birth certificate data together with event study and triple-difference designs, Vu finds that SC increases the incidence of very low birth weight by 23% for infants of foreign-born Hispanic mothers, who were most likely to be affected by immigration enforcement. There is suggestive evidence that the results are consistent with (i) changes in maternal stress induced by deportation fear and (ii) inadequate prenatal nutrition. A back-of-the-envelope calculation suggests that the unintended social cost of immigration enforcement approaches $2 billion annually.

Inequality in Mortality between Black and White Americans by Age, Place, and Cause, and in Comparison to Europe, 1990-2018
Hannes Schwandt, Northwestern University and NBER
Janet Currie, Princeton University and NBER
Marlies Bär, Erasmus University
James Banks, University of Manchester
Paola Bertoli, University of Verona
Aline Bütikofer, Norwegian School of Economics
Sarah Cattan, Institute for Fiscal Studies
Beatrice Zong-Ying Chao, Northwestern University
Claudia Costa, University of Coimbra
Libertad Gonzalez, Universidad Pompeu Fabra
Veronica Grembi, Copenhagen Business School
Kristiina Huttunen, Aalto University School of Economics
René Karadakic, Norwegian School of Economics
Lucy Kraftman, Institute for Fiscal Studies
Sonya Krutikova, Institute for Fiscal Studies
Stefano Lombardi, VATT Institute for Economic Research
Peter Redler, University of Munich
Carlos Javie. Riumallo Herl, Erasmus University
Ana Rodriguez-Gonzalez, Lund University
Kjell G. Salvanes, Norwegian School of Economics
Paula Santana, University of Coimbra
Josselin Thuilliez, CNRS (Centre National de la Recherche Scientifique) & Univ. Paris 1
Eddy Van Doorslaer, Erasmus Univeristat Rotterdam
Tom Van Ourti, Erasmus University Rotterdam
Joachim Winter, University of Munich
Bram Wouterse, Erasmus University Rotterdam
Amelie C. Wuppermann, University of Halle-Wittenberg
Jonathan S. Skinner, Dartmouth College and NBER

Although there is a large gap between Black and White American life expectancies, the gap fell 48.9% between 1990-2018, mainly due to mortality declines among Black Americans. The researchers examine age-specific mortality trends and racial gaps in life expectancy in rich and poor U.S. areas and with reference to six European countries.
Inequalities in life expectancy are starker in the U.S. than in Europe. In 1990 White Americans and Europeans in rich areas had similar overall life expectancy, while life expectancy for White Americans in poor areas was lower. But since then even rich White Americans have lost ground relative to Europeans. Meanwhile, the gap in life expectancy between Black Americans and Europeans decreased by 8.3%.
Black life expectancy increased more than White life expectancy in all U.S. areas, but improvements in poorer areas had the greatest impact on the racial life expectancy gap. The causes that contributed the most to Black mortality reductions included: Cancer, homicide, HIV, and causes originating in the fetal or infant period.
Life expectancy for both Black and White Americans plateaued or slightly declined after 2012, but this stalling was most evident among Black Americans even prior to the COVID-19 pandemic. If improvements had continued at the 1990-2012 rate, the racial gap in life expectancy would have closed by 2036. European life expectancy also stalled after 2014. Still, the comparison with Europe suggests that mortality rates of both Black and White Americans could fall much further across all ages and in both rich and poor areas.


This paper was distributed as Working Paper 29203, where an updated version may be available.

General Equilibrium Effects of Insurance Expansions: Evidence from Long-Term Care Labor Markets
Martin B. Hackmann, University of California, Los Angeles and NBER
Jörg Heining, Institute for Employment Research (IAB)
Roman Klimke, Harvard University
Maria Polyakova, Stanford University and NBER
Holger Seibert, Institute for Employment Research (IAB)
Carol Propper, Imperial College London

Arrow (1963) hypothesized that demand-side moral hazard induced by health insurance leads to supply-side expansions in healthcare markets. Baicker and Chandra (2012) argued that additional healthcare jobs, which likely follow such moral hazard, are inefficient. Shedding light on these arguments empirically has been challenging, as non-marginal insurance expansions are rare and detailed data on the healthcare workforce is sparse. Hackmann, Heining, Klimke, Polyakova, and Seibert combine administrative labor market data with the geographic variation in the roll-out of a universal insurance program - introduction of long-term care (LTC) insurance in Germany in 1995 - to document a substantial expansion of the inpatient LTC labor market in response to insurance expansion. A 10 percentage point expansion in the share of insured elderly lead to 0.05 (7%) more inpatient LTC firms and 4 (13%) more workers per 1,000 elderly in Germany. Wages did not rise, but the quality of newly hired workers declined. The researchers find suggestive evidence of a reduction in old-age mortality. Using a machine learning algorithm, they characterize counterfactual labor market biographies of potential inpatient LTC hires, finding that the reform moved workers into LTC jobs from unemployment rather than other sectors of the economy. Hackmann, Heining, Klimke, Polyakova, and Seibert estimate that employing these workers is socially efficient if patients value the care provided by these workers at least at 25% of the market price for care. They show conceptually that, in the spirit of Harberger (1971), in a second-best equilibrium when supply-side labor markets do not clear at perfectly competitive wages, subsidies for healthcare consumption along with the associated demand-side moral hazard can be welfare-enhancing.

Team-Specific Human Capital and Team Performance: Evidence from Doctors
Yiqun Chen, University of Illinois at Chicago
Joseph J. Doyle, Massachusetts Institute of Technology and NBER

This paper studies whether team members' past collaboration creates team-specific human capital and influences current team performance. Using administrative Medicare claims for two heart procedures, Chen finds that shared work experience between the doctor who performs the procedure ("proceduralist") and the doctors who provide care to the patient during the hospital stay for the procedure ("physicians") reduces patient mortality rates. A one standard deviation increase in proceduralist-physician shared work experience leads to a 10-14 percent reduction in patient 30-day mortality. Patient medical resource use also declines with shared work experience, even as survival improves.

What Difference Does a Diagnosis Make? Evidence from Marginal Patients
Mattan C. Alalouf, University of Michigan
Sarah Miller, University of Michigan and NBER
Laura Wherry, New York University and NBER
Petra Persson, Stanford University and NBER

This paper explores the impact of receiving a diagnosis of diabetes among patients who are close to the diagnostic threshold using a regression discontinuity design. Alalouf, Miller, and Wherry find that a marginally diagnosed patient with diabetes spends $1,097 more on drugs and diabetes-related care annually after diagnosis, but find no corresponding changes in self-reported health or healthy behaviors. These increases in spending persist over the 6-year period the researchers observe the patients, despite many who are not initially diagnosed receiving a later diagnosis during this time frame. These marginally diagnosed patients experience improved blood sugar after the first year of diagnosis, but this improvement does not persist in subsequent years. Other clinical measures of health, such as BMI, blood pressure, cholesterol, and mortality show no improvement. The diagnosis rates for preventable disease-related conditions such as diabetic retinopathy, neuropathy, and kidney disease increase following a diagnosis, likely due to more intensive screening.


This paper was distributed as Working Paper 26363, where an updated version may be available.


Iwan Barankay, University of Pennsylvania
Roman Klimke, Harvard University
Xuelin Li, University of Minnesota
Conor B. Ryan, Pennsylvania State University
Amy K. Taylor, Agency for Healthcare Research and Quality
Hoa Vu, University of Wisconsin-Madison

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