Replication data for: Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges

Principal Investigator(s): View help for Principal Investigator(s) Michael Geruso; Timothy Layton; Daniel Prinz

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Project Citation:

Geruso, Michael, Layton, Timothy, and Prinz, Daniel. Replication data for: Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114708V1

Project Description

Summary: We study insurers' use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types. A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening. The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard.

Scope of Project

JEL Classification:
      D82 Asymmetric and Private Information; Mechanism Design
      G22 Insurance; Insurance Companies; Actuarial Studies
      H51 National Government Expenditures and Health
      I13 Health Insurance, Public and Private
      I18 Health: Government Policy; Regulation; Public Health

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Published Versions

V1 [2019-10-13]

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