Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts
利用马萨诸塞州补贴保险交换的行政数据，研究低收入成年人支付意愿和保险成本，发现补贴下降时参保率快速下降，边际参保者成本较低，存在逆向选择，且即使高补贴下参保率仍不完整。
How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts’ subsidized insurance exchange, we exploit discontinuities in the subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. As subsidies decline, insurance take-up falls rapidly, dropping about 25 percent for each $40 increase in monthly enrollee premiums. Marginal enrollees tend to be lower-cost, indicating adverse selection into insurance. But across the entire distribution we can observe (approximately the bottom 70 percent of the willingness to pay distribution) enrollees’ willingness to pay is always less than half of their own expected costs that they impose on the insurer. As a result, we estimate that take-up will be highly incomplete even with generous subsidies. If enrollee premiums were 25 percent of insurers’ average costs, at most half of potential enrollees would buy insurance; even premiums subsidized to 10 percent of average costs would still leave at least 20 percent uninsured. We briefly consider potential explanations for these findings and their normative implications.