Code for: Adverse Selection and Network Design Under Regulated Plan Prices: Evidence From Medicaid

Name: Code for: Adverse Selection and Network Design Under Regulated Plan Prices: Evidence From Medicaid
Published: 2025-04-07
License: https://opensource.org/licenses/MIT

Principal Investigator(s): View help for Principal Investigator(s) Amanda R. Kreider, University of Pittsburgh; Timothy J. Layton, University of Virginia; Mark Shepard, Harvard University; Jacob Wallace, Yale University

Version: View help for Version V1

Version Title: View help for Version Title Initial release

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Project Description

Summary: Health plans for the poor increasingly limit access to specialty hospitals. We investigate the role of adverse selection in generating this equilibrium among private plans in Medicaid. Studying a network change, we find that covering a top cancer hospital causes severe adverse selection, increasing demand for a plan by 50% among enrollees with cancer versus no impact for others. Medicaid’s fixed insurer payments make offsetting this selection, and the contract distortions it induces, challenging, requiring either infeasibly high payment rates or near-perfect risk adjustment. By contrast, a small explicit bonus for covering the hospital is sufficient to make coverage profitable.

Scope of Project

Subject Terms: Medicaid; adverse selection; cancer care; managed care; health economics; risk adjustment; provider networks

Geographic Coverage: New York, USA

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Published Versions

V1 [2025-04-07]

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