Health Care Management Papers

Document Type

Journal Article

Date of this Version

5-2012

Publication Source

American Economic Review

Volume

102

Issue

3

Start Page

498

Last Page

501

DOI

10.1257/aer.102.3.498

Abstract

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.

Copyright/Permission Statement

Copyright © 2016 AEA

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Date Posted: 27 November 2017

This document has been peer reviewed.