Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform
We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the reform. We find that counties with larger increases in insurance coverage over the reform period face the smallest increase in average hospital costs for the insured population, consistent with adverse selection into insurance before the reform. Additional results, incorporating cross-state variation and data on health measures, provide further evidence for adverse selection.
Funding from the NBER Household Finance Working Group through the Alfred P. Sloan Foundation, the National Institute on Aging grant #P30 AG012810, the Leonard Davis Institute for Health Economics, and the Wharton Deans Research Fund are gratefully acknowledged. Kowalski is the 2011-2012 Okun Model Early Career Fellow at the Brookings Institution. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Martin B. Hackmann & Jonathan T. Kolstad & Amanda E. Kowalski, 2012. "Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform," American Economic Review, American Economic Association, vol. 102(3), pages 498-501, May. citation courtesy of