Regulated Age-Based Pricing in Subsidized Health Insurance: Evidence from the Affordable Care Act

37 Pages Posted: 6 Jul 2017 Last revised: 10 Nov 2017

See all articles by Joe Orsini

Joe Orsini

Nuna Health

Pietro Tebaldi

University of Chicago - Department of Economics

Date Written: November 9, 2017

Abstract

We study age-rating restrictions in the health insurance marketplaces introduced by the Affordable Care Act. Because most buyers are subsidized, although age-rating restrictions affect pre-subsidy premiums, participation is primarily driven by subsidy generosity rather than pricing decisions. Combining pre and post-reform data on prices and enrollment we find that age-rating restrictions altered pre-subsidy premiums: $230/year for under-50 buyers and -$900/year for over-50 buyers. Accounting for the ACA subsidy design, this regulation decreased federal spending by more than 10%, and reduced participation by 2% (-4% among under-50, 2% among over-50). These effects differ across regions, varying with the age-composition of the uninsured.

Keywords: health insurance, ACA, health reform, age-rating, age bands

JEL Classification: I11, I13, I18, H51

Suggested Citation

Orsini, Joe and Tebaldi, Pietro, Regulated Age-Based Pricing in Subsidized Health Insurance: Evidence from the Affordable Care Act (November 9, 2017). Becker Friedman Institute for Research in Economics Working Paper No. 2017-02. Available at SSRN: https://ssrn.com/abstract=2997528 or http://dx.doi.org/10.2139/ssrn.2997528

Joe Orsini

Nuna Health ( email )

Pietro Tebaldi (Contact Author)

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

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