COWLES FOUNDATION FOR RESEARCH IN
ECONOMICS Box 208281
COWLES FOUNDATION DISCUSSION PAPER NO. 1841 Health Reform, Health Insurance, and Selection: Martin B. Hackmann, Jonathan T. Kolstad, and Amanda E. Kowalski January 2012 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. |
