Thesis advisor: Michael D. Grubb / The first chapter studies behavioral mechanisms to expand health insurance coverage. In health insurance markets where regulators limit insurers' ability to price on the health status of individuals, a traditional regulatory intervention to protect the market from adverse selection and expand coverage among young and healthy people is mandating insurance coverage. In this chapter, I analyze an alternative, behavioral mechanism in the context of the Affordable Care Act Marketplaces: the automatic enrollment of the uninsured with possible opt-out. I build a theoretical model which shows that this nudging policy increases coverage rates, and the size of its benefit depends on the strength of consumer inertia. Using an individual-level panel dataset on health insurance plan choice and claims, I estimate a structural model of health insurance demand and supply in the presence of switching costs. Simulating the effects of the policy, I find that auto-enrollment can increase enrollment rates by over 60% and reduce annual premiums by $300. Moreover, I show that taking into account the heterogeneity of preferences is essential when designing default plans for auto-enrolled consumers. Defaulting everyone into the same contract type leads to more quitting due to inefficient matching and it may also indirectly increase adverse selection on the intensive margin through the price adjustment mechanism. The results of this paper suggest that in order to avoid these problems and maximize the benfits of auto-enrollment in selection markets, it is important to design smart default policies. The second chapter explores how changes in cost sharing affect consumers' demand for health care. Cost sharing reduction (CSR) subsidies are a less well-known provision of the Affordable Care Act (ACA) that aimed to make private health insurance coverage more affordable. These subsidies discontinuously increase the share of expenses paid by the insurer as enrollee income crosses the eligibility cutoffs. This specific subsidy design provides a unique setting to identify moral hazard in health care utilization from observational data that is a major empirical challenge in the literature. In this chapter, I combine individual-level post-subsidy premium data from an All Payer Claims Database with information on plan-level base prices to recover the amount of the premium subsidy. Applying the ACA's premium subsidy formula backwards, I am able to estimate family income. Using this imputed income, I exploit a sharp regression discontinuity design to study the impact of changes in actuarial value on consumer behavior. I find significant increases in health care utilization at income levels associated with the CSR subsidy eligibility cutoffs. These results imply that individuals tend to use more health care services only due to the fact that the insurer becomes responsible for a larger share of their expenditures. These results provide insights about the price elasticity of demand for medical care in a new context. The third chapter evaluates the impact of the ACA on HPV vaccination. Rates of completion of the HPV vaccine series remain suboptimal in the US. The effects of the ACA on HPV vaccine completion are largely unknown. The aim of this study was to examine the associations between the ACA's 2010 provisions and 2014 insurance expansions with HPV vaccine completion by sex and health insurance type. Using 2009-2015 public and private health insurance claims, we conducted a logistic regression model to examine the associations between the ACA policy changes with HPV vaccine completion as well as interactions by sex and health insurance type. Among females and males who initiated the HPV vaccine, 27.6% and 28.0%, respectively, completed the series within 12 months. Among females, the 2010 ACA provision was associated with increases in HPV vaccine completion for the privately-insured and Medicaid enrollees. The 2014 health insurance expansions were associated with increases in vaccine completion for females with private insurance and Medicaid. Among males, the 2014 ACA reforms were associated with increases in HPV vaccine completion for the privately-insured and Medicaid enrollees. Despite low HPV vaccine completion overall, both sets of ACA provisions increased completion among females and males. Our results suggest that expanding Medicaid across the remaining states could increase HPV vaccine completion among publicly-insured youth and prevent HPV-related cancers. / Thesis (PhD) — Boston College, 2020. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

The dissertation consists of two essays on insurance markets and regulation. The first essay studies the timing of state-level tort reform enactments between 1971 and 2005. Using discrete time hazard models, we find the level of litigation activity---as measured by incurred liability insurance losses, the number of lawyers, and tort cases commenced---to be the most important and robust determinant of tort reform adoption. Political-institutional factors and regional effects---such as Republican control of the state government, single party control of the legislature and governorship, and a (relatively) conservative political ideology among a state’s Democrats---are also associated with quicker reform adoption. In the second essay, we identify the effect of public guarantees on market discipline by exploiting the rich variation in U.S. state guarantees of property-liability insurer obligations. We find government guarantees significantly reduce the sensitivity of premium growth to changes in financial strength ratings, and that this reduced sensitivity applies to both price and volume changes. The effects are concentrated among insurers rated A- or lower by A.M. Best, the leading financial strength rating agency in the insurance industry. For downgraded insurers, we find that premium growth in business not covered by state guarantees falls in relation to growth in its covered business, with the estimate of the difference being as high as 15% for A- rated insurers and 10% for insurers rated below A-.

Thesis (Ph.D.)--Boston University / PLEASE NOTE: Boston University Libraries did not receive an Authorization To Manage form for this thesis or dissertation. It is therefore not openly accessible, though it may be available by request. If you are the author or principal advisor of this work and would like to request open access for it, please contact us at open-help@bu.edu. Thank you. / Health care systems are complex organizations. Multiple agents interact in different settings to provide health care, each one of them with different objectives and information. How markets are organized and which actions are allowed, has a direct impact on the incentives agents face when making health care choices. In this dissertation, I study the determinants and effects of these choices on market outcomes, focusing on private health insurance markets. The first chapter provides insights about health insurance markets in which workers, rather than firms , choose insurance plans in an imperfect competition setting. Using a unique dataset that includes every person enrolled in private plans in Chile in 2009, I estimate underlying preference parameters over health insurance features. I find large heterogeneity in the valuation of t hese features across age-sex-groups and individual types. Individual characteristics play an important role on health plan choices and therefore, can be used by insurers to design plans targeted to specific groups and for patient selection. The second chapter presents a theoretical model where private insurers compete with a free public alternative to attract clients. Using a two-type model I show that if private insurance companies offer a non-rationing alternative and the public system rationing is done through random selection, an efficiency trap may exist. A marginal increase in the budget allocated to the public system can potentially reduce the expected welfare for all types. This result extends to a model with multiple types, but the negative welfare impact is offset by a crowding-in effect among the rich. Finally, the third chapter provides a general analytical framework that can be used to evaluate risk selection under different health care models. The model is based on the interactions between the four key agents present in every health care system: sponsors, health plans, providers and customers. This framework is used to review risk selection in four countries in the Americas - Canada, Chile, Colombia, and the U.S.-, showing how regulatory policies both create and ameliorate it, and in some cases are as important as risk adjustment, risk sharing and risk selection strategies for reducing risk selection. / 2031-01-01

O objetivo desta dissertação foi analisar o mercado de saúde suplementar no Brasil e avaliar as regulamentações da Agência Nacional de Saúde Suplementar – ANS, órgão regulador do setor, no contexto da teoria da informação assimétrica. Para tanto, utilizou-se a teoria da informação assimétrica através dos problemas de seleção adversa e risco moral a fim de analisar os problemas regulatórios. Também foram levantados dados e referenciais teóricos do mercado de planos de saúde no Brasil, principalmente no que se refere a sua regulação e suas implicações. A revisão bibliográfica deste trabalho indica que diversos estudos já evidenciaram a presença de assimetria de informação no mercado de saúde suplementar. A avaliação econômica de quatro resoluções normativas da ANS também corrobora para com essa evidência e explicam a presença de seleção adversa e risco moral evidenciados da literatura. Este trabalho conclui que a regulação desse mercado falhou, no que tange a redução das falhas de mercado, mais precisamente com relação com relação à assimetria de informação, onde sua presença tornou-se mais acentuadas com suas constantes intervenções, comprometendo a sustentabilidade do mercado e reduzindo o nível de bem-estar econômico. / The objective of this dissertation was to analyze the health insurance market in Brazil and evaluate the regulations of the National Health Agency - ANS, regulatory agency, in the context of the theory of asymmetric information. Therefore, we used the theory of asymmetric information through the problems of adverse selection and moral hazard in order to analyze the regulatory problems. Also data and theoretical of the health insurance market benchmarks in Brazil, especially in relation to regulation and its implications were raised. The literature review of this work indicates that several studies have demonstrated the presence of asymmetric information in the supplementary health market. The economic evaluation of four legislative resolutions ANS also corroborates with this evidence and explain the presence of adverse selection and moral hazard evidenced literature. This paper concludes that the regulation of the market has failed, as regards the reduction of market failures, specifically with respect with respect to information asymmetry, where their presence has become more pronounced with their constant interventions, compromising the sustainability of the market and reducing the level of economic welfare.

O objetivo desta dissertação foi analisar o mercado de saúde suplementar no Brasil e avaliar as regulamentações da Agência Nacional de Saúde Suplementar – ANS, órgão regulador do setor, no contexto da teoria da informação assimétrica. Para tanto, utilizou-se a teoria da informação assimétrica através dos problemas de seleção adversa e risco moral a fim de analisar os problemas regulatórios. Também foram levantados dados e referenciais teóricos do mercado de planos de saúde no Brasil, principalmente no que se refere a sua regulação e suas implicações. A revisão bibliográfica deste trabalho indica que diversos estudos já evidenciaram a presença de assimetria de informação no mercado de saúde suplementar. A avaliação econômica de quatro resoluções normativas da ANS também corrobora para com essa evidência e explicam a presença de seleção adversa e risco moral evidenciados da literatura. Este trabalho conclui que a regulação desse mercado falhou, no que tange a redução das falhas de mercado, mais precisamente com relação com relação à assimetria de informação, onde sua presença tornou-se mais acentuadas com suas constantes intervenções, comprometendo a sustentabilidade do mercado e reduzindo o nível de bem-estar econômico. / The objective of this dissertation was to analyze the health insurance market in Brazil and evaluate the regulations of the National Health Agency - ANS, regulatory agency, in the context of the theory of asymmetric information. Therefore, we used the theory of asymmetric information through the problems of adverse selection and moral hazard in order to analyze the regulatory problems. Also data and theoretical of the health insurance market benchmarks in Brazil, especially in relation to regulation and its implications were raised. The literature review of this work indicates that several studies have demonstrated the presence of asymmetric information in the supplementary health market. The economic evaluation of four legislative resolutions ANS also corroborates with this evidence and explain the presence of adverse selection and moral hazard evidenced literature. This paper concludes that the regulation of the market has failed, as regards the reduction of market failures, specifically with respect with respect to information asymmetry, where their presence has become more pronounced with their constant interventions, compromising the sustainability of the market and reducing the level of economic welfare.

O objetivo desta dissertação foi analisar o mercado de saúde suplementar no Brasil e avaliar as regulamentações da Agência Nacional de Saúde Suplementar – ANS, órgão regulador do setor, no contexto da teoria da informação assimétrica. Para tanto, utilizou-se a teoria da informação assimétrica através dos problemas de seleção adversa e risco moral a fim de analisar os problemas regulatórios. Também foram levantados dados e referenciais teóricos do mercado de planos de saúde no Brasil, principalmente no que se refere a sua regulação e suas implicações. A revisão bibliográfica deste trabalho indica que diversos estudos já evidenciaram a presença de assimetria de informação no mercado de saúde suplementar. A avaliação econômica de quatro resoluções normativas da ANS também corrobora para com essa evidência e explicam a presença de seleção adversa e risco moral evidenciados da literatura. Este trabalho conclui que a regulação desse mercado falhou, no que tange a redução das falhas de mercado, mais precisamente com relação com relação à assimetria de informação, onde sua presença tornou-se mais acentuadas com suas constantes intervenções, comprometendo a sustentabilidade do mercado e reduzindo o nível de bem-estar econômico. / The objective of this dissertation was to analyze the health insurance market in Brazil and evaluate the regulations of the National Health Agency - ANS, regulatory agency, in the context of the theory of asymmetric information. Therefore, we used the theory of asymmetric information through the problems of adverse selection and moral hazard in order to analyze the regulatory problems. Also data and theoretical of the health insurance market benchmarks in Brazil, especially in relation to regulation and its implications were raised. The literature review of this work indicates that several studies have demonstrated the presence of asymmetric information in the supplementary health market. The economic evaluation of four legislative resolutions ANS also corroborates with this evidence and explain the presence of adverse selection and moral hazard evidenced literature. This paper concludes that the regulation of the market has failed, as regards the reduction of market failures, specifically with respect with respect to information asymmetry, where their presence has become more pronounced with their constant interventions, compromising the sustainability of the market and reducing the level of economic welfare.