Working Paper

Cost-Sharing Reduction Subsidy: Who Benefits and How It Should be Financed, Evidence from California Health Exchange (Job Market Paper)
        Abstract
        With annual spending of $7 billion, the Affordable Care Act (ACA) Cost-sharing Reduction (CSR) subsidies offer extra benefits such as a lower deductible and a lower out-of-pocket maximum to eligible low-income enrollees who purchase any qualified plan on the exchanges. In October 2017, the government terminated the CSR payments, but still requires insurers to offer such extra benefits. I investigate how CSR defunding impacted insurers, consumers, and public spending. Combining individual-level claims data from a major insurer in California and individual-level enrollment data, I estimate a model of insurance demand and insurers’ competition. I find that CSR-eligible households are significantly less price-sensitive and more costly for insurers to cover. Consequently, counterfactuals show that CSR defunding can reduce insurer profits and discourage insurers from participating in the exchanges. The impact on consumer surplus, insurer surplus, and government spending depends on insurers’ market participation and how they raise premiums to cover the CSR costs. Removing CSR benefits impairs consumer surplus among low-income households, and does not reduce government spending.
    
        [Latest Draft]

Cost-sharing reduction subsidies in ACA exchanges contributed to the stability of Bronze and Silver plans (prepare for submission), with Guy David, Ezra Fishman, Andrea DeVries, Jason Margus and Jennifer Kowalski
        Abstract
        We estimated the extent to which adverse selection was present in the individual market by comparing spending among individual-market enrollees to spending among small-group enrollees insured with actuarially similar products from a large national issuer, 2014 through 2017. We found that individual-market enrollees only incurred higher spending than their small-group counterparts in plans of generous coverage, which corresponded to less than 10% of person-years of individual market enrollment. Thus, the large majority of the individual market, which is covered by Bronze and Silver products, did not experience more adverse selection than was present in the small-group market. The CSR subsidies played an important role in attracting low-risk low-income households and contribute to the stability of the individual market.

Adverse Selection in Individual Health Insurance Market (manuscript), with Guy David, Ezra Fishman, and Andrea DeVries
        Abstract
        This paper examines the adverse selection among the on-exchange insurees on two dimensions: riskier insurees’ enrollment in more generous plans, and their strategic decisions on when to enroll and how long to stay covered. We find clear evidence of adverse selection in coverage in all non-Bronze tiers in both on-exchange and small-group plans. The level of selection increases with plan generosity and is severer among on-exchange insurees than small-group insurees across all tiers. We find no evidence of adverse selection in enrollment duration among small-group insurees. For on-exchange insurees, only those who enroll in generous plans strategically choose enrollment duration, and premium subsidy receipt significantly increases an on-exchange insuree’s probability to stay in coverage.

Works in Progress

The Trade-off Between Permanent and Temporary Nursing Staff, with Steve Schawb and Kija Korowicki
        Abstract
        A majority of hospitals in the United States rely on temporary nursing contracts to augment their permanent staff. Using data from the Military Health System, where military nurses of varying experience levels are plausibly exogenously moved between hospitals and “loaned” between wards, we identify the effects of temporary nursing staff. We find that for each one full-time equivalent increase in temporary staff, there is a 0.3 percent increase in workload in the next period – roughly equivalent to 10 additional hours of labor per month on average. We then develop a dynamic model in which hospitals trade-off the lost productivity of temporary employees with the cost of hiring permanent workers.