Persistent Link:
http://hdl.handle.net/10150/228491
Title:
Switching Costs in the Market for Medicare Advantage Plans
Author:
Nosal, Kathleen Elizabeth
Issue Date:
2012
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
Medicare eligibles have the option of choosing from a menu of privately administered managed care plans, known as Medicare Advantage (MA) plans, in lieu of conventional fee-for-service Medicare coverage ("original Medicare"). These plans often provide extra benefits to enrollees, but may impose large switching costs as a result of restrictive provider networks, differences in coverage across plans, and learning and search costs. I propose a structural dynamic discrete choice model of how consumers who are persistently heterogeneous make the choice among MA plans and original Medicare based on the characteristics of the available MA plans. The model explicitly incorporates a switching cost and changes over time in choice sets and plan characteristics. I estimate the parameters of the model, including the switching cost, using the methods developed by Gowrisankaran and Rysman (2011). The estimates indicate that the switching cost is statistically and economically significant. Through a series of counterfactual analyses, I find that the share of consumers choosing MA plans in place of original Medicare would more than triple in the absence of switching costs, and nearly double if plan exit and quality changes were eliminated. I also find that when switching costs are accounted for the Medicare Advantage program only minimally increases consumer welfare.
Type:
text; Electronic Dissertation
Keywords:
Medicare Advantage; Switching costs; Economics; Health insurance; Medicare
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Economics
Degree Grantor:
University of Arizona
Advisor:
Gowrisankaran, Gautam

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleSwitching Costs in the Market for Medicare Advantage Plansen_US
dc.creatorNosal, Kathleen Elizabethen_US
dc.contributor.authorNosal, Kathleen Elizabethen_US
dc.date.issued2012-
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractMedicare eligibles have the option of choosing from a menu of privately administered managed care plans, known as Medicare Advantage (MA) plans, in lieu of conventional fee-for-service Medicare coverage ("original Medicare"). These plans often provide extra benefits to enrollees, but may impose large switching costs as a result of restrictive provider networks, differences in coverage across plans, and learning and search costs. I propose a structural dynamic discrete choice model of how consumers who are persistently heterogeneous make the choice among MA plans and original Medicare based on the characteristics of the available MA plans. The model explicitly incorporates a switching cost and changes over time in choice sets and plan characteristics. I estimate the parameters of the model, including the switching cost, using the methods developed by Gowrisankaran and Rysman (2011). The estimates indicate that the switching cost is statistically and economically significant. Through a series of counterfactual analyses, I find that the share of consumers choosing MA plans in place of original Medicare would more than triple in the absence of switching costs, and nearly double if plan exit and quality changes were eliminated. I also find that when switching costs are accounted for the Medicare Advantage program only minimally increases consumer welfare.en_US
dc.typetexten_US
dc.typeElectronic Dissertationen_US
dc.subjectMedicare Advantageen_US
dc.subjectSwitching costsen_US
dc.subjectEconomicsen_US
dc.subjectHealth insuranceen_US
dc.subjectMedicareen_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.disciplineEconomicsen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorGowrisankaran, Gautamen_US
dc.contributor.committeememberHirano, Keisukeen_US
dc.contributor.committeememberXiao, Moen_US
dc.contributor.committeememberGowrisankaran, Gautamen_US
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