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Description

We introduce a new experimental approach to measuring the effects of health insurance policy alternatives on behavior and health outcomes over the life course. Cash-motivated subjects are placed in a virtual environment where they earn income and allocate it across multi-period lives. We compare behavior across age, income and insurance plans---one priced according to an individual's expected cost and the other uniformly priced through employer-implemented cost sharing. We find that 1) subjects in the employer-implemented plan purchased insurance at higher rates; 2) the employer-based plan reduced differences due to income and age; 3) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Subjects had more difficulty optimizing choices in the Actuarial treatment, because it required more long- term planning and evaluating benefits that compounded over time. Contrary, to model predictions, the actuarial priced insurance plan did not increase utility relative to the employer-based plan.

Publication Date

11-2020

Keywords

Health insurance, Moral hazard, Inter-generational, Subsidies, Actuarially fair, Employer-based

Disciplines

Econometrics | Economics | Economic Theory | Other Economics

Comments

The ZIP file above contains a ReadMe.txt and 4 (sub)folders: code, data, figures & tables. Files in the code folder use files in the data folder to produce figure and tables, which then are written to their respective folders.

Copyright

The authors

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 4.0 License.

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