Open Enrollment Periods and Plan Choices

Francesco Decarolis, Andrea Guglielmo, Calvin Luscombe

NBER Working Paper No. 24156
Issued in December 2017
NBER Program(s):Health Care, Health Economics, Public Economics

Open enrollment periods are pervasively used in insurance markets to limit adverse selection risks resulting when enrollees can switch plans at will. We exploit a change in the open enrollment rules of Medicare Part C and Part D to analyze how Medicare beneficiaries responded to the option of switching to 5-star rated plans at anytime, in a setting where insurers adjusted premiums and benefit design to counterbalance the increased selection risk. We find that within-year switches to 5-star plans increased by 7-16% and that those who switch are advantageously selected. Furthermore, demand for 5-star plans across the years did not change

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Document Object Identifier (DOI): 10.3386/w24156

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