New Directions in Health Insurance Demand

The goal for today’s class is to consider where the research on health insurance might be headed and discuss some papers in those directions. For these classes, I’m trying to select topics with significant policy interest and room for additional research. There are many areas of active research in the study of health insurance, so this is far from exhaustive. Focus areas and selected papers for this class are listed below.

Health Insurance Design and Consumer Behavior

The design of health insurance plans (like copayments, deductibles, and coverage decisions) directly affects consumer choices and healthcare utilization. This area is crucial for policy design, ensuring that insurance structures meet both economic efficiency and equity goals. We’ll discuss Brown and Jeon (2023) and Ho and Lee (2020) as an example of this line of current/future research.

Innovation/Technology Adoption and Health Insurance

In affecting how services are paid for, insurance can also affect the adoption of new technologies and innovations in healthcare. We’ll discuss Garthwaite (2012) and Agha, Kim, and Li (2022) as examples of this line of work.

Health Insurance Networks

The structure of health insurance networks can affect the quality of care that patients receive. We’ll briefly discuss Gruber and McKnight (2016) as an example of this line of work, even though it is a little bit older for “current/future” research, and we’ll discuss Kreider et al. (2022) as a more recent example in this space.

References

Agha, Leila, Soomi Kim, and Danielle Li. 2022. “Insurance Design and Pharmaceutical Innovation.” American Economic Review: Insights 4 (2): 191–208. https://doi.org/10.1257/aeri.20210063.
Brown, Zach Y, and Jihye Jeon. 2023. “Endogenous Information and Simplifying Insurance Choice,” August. https://public-websites-umich-edu.proxy.library.emory.edu/~zachb/brown_jeon_endo_info.pdf.
Garthwaite, Craig L. 2012. “The Doctor Might See You Now: The Supply Side Effects of Public Health Insurance Expansions.” American Economic Journal: Economic Policy 4 (3): 190–215. https://doi.org/10.1257/pol.4.3.190.
Gruber, Jonathan, and Robin McKnight. 2016. “Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees.” American Economic Journal: Economic Policy 8 (2): 219–50. https://doi.org/10.1257/pol.20140335.
Ho, Kate, and Robin S. Lee. 2020. “Health Insurance Menu Design for Large Employers,” Working Paper Series, September. https://doi.org/10.3386/w27868.
Kreider, Amanda R., Timothy J. Layton, Mark Shepard, and Jacob Wallace. 2022. “Adverse Selection and Network Design Under Regulated Plan Prices: Evidence from Medicaid.” w30719. National Bureau of Economic Research. https://doi.org/10.3386/w30719.