Assistant Professor
University of Pittsburgh Graduate School of Public Health
Department of Health Policy and Management
Abstract
The Affordable Care Act’s premium tax credit subsidies provide millions of eligible enrollees with the option to purchase zero-premium health insurance plans, but millions more do not have this option. What difference does a premium of zero make, relative to a slightly positive one? We use regression discontinuity designs to examine zero-price effects in health insurance coverage take-up, plan choice, and coverage duration using administrative data from Colorado’s Health Insurance Marketplace from 2016 through 2019. Unlike previous studies, we isolate zero-price effects from high price sensitivity near zero using rich variation from Marketplace premium tax credits. We find no discontinuity in insurance choices when premiums increase from to a slightly positive amount, suggesting that zero is not a special price for customers. However, zero-premiums plans increase on-time enrollment, leading to longer coverage duration by reducing the transaction cost of making an initial premium payment. As low-income customers are especially sensitive to this transaction cost, making zero-premium plans available may increase targeting efficiency.
Bio
Dr. Drake is an Assistant Professor in the Department of Health Policy and Management, as well as an affiliate faculty member at the Medicaid Research Center and the Center for Pharmaceutical Policy and Prescribing (CP3). Dr. Drake earned his PhD in Health Services Research, Policy and Administration with a focus in health economics from the University of Minnesota School of Public Health. He also was a health economics fellow at the Becker Friedman Institute at the University of Chicago during his final year of doctoral studies. His research has been funded by the NIH (NIDA), the National Institute of Health Care Management, the Arnold Foundation, and the Robert Wood Johnson Foundation. Dr. Drake’s research focuses on access to care for vulnerable populations. His two current areas of interest are ongoing policy changes to the Health Insurance Marketplaces created by the Affordable Care Act, and geographic access to medications for opioid use disorder. His research has been published in leading journals such as The Journal of Health Economics, Health Affairs, The Annals of Internal Medicine, and JAMA – Internal Medicine.