CAREER: Empirical Studies on the Impact of Public Policy and Incentive Design in Insurance for Health-Related Risks

Many of the large financial risks individuals face are related to adverse health incidents, such as costly medical bills, lost work time, and permanent disability. Insurance can reduce the financial impact of health shocks, and government intervention in health insurance markets can have large effects on the health and broader wellbeing of individuals. It is therefore important to understand the most efficient design of incentives and the consequences of government intervention in these markets. This CAREER research project will combine several administrative data sets with modern research strategies to analyze many aspects of insurance market design for health risks. The research results will inform public policy on health insurance markets which serve in an important way to improve the lives of millions of individuals in the United States. The results of this research project will contribute to lower healthcare cost, improve health, and ultimately increase worker productivity and economic growth in the U.S.

This CAREER research project consists of a series of empirical studies on the impact of public policy and incentive design within two health-related insurance settings: workers' compensation insurance and health insurance provided by Medicare and Medicaid. The first component investigates the setting of workers' compensation insurance. This study will analyze the importance of coverage mandates in addressing insurance market failures such as adverse selection and externalities, utilizing variation and administrative data. The aim of this component is to leverage datasets created by linking administrative data sets on workers' compensation policies, worker labor market outcomes, and claims. The second project investigates incentive design within Medicare and Medicaid. This study investigates the impact of physician incentives for providing health care to beneficiaries dually eligible for Medicare and Medicaid leveraging a sharp change in physician payment rates for selected services provided to dual-eligible beneficiaries with the introduction of the ACA. The final component is an integrated education plan, which focuses on developing a mentoring workshop in health economics for advanced graduate students and recent PhDs. The result of this research project will provide important health insurance policy inputs that will improve efficiency in the sector.