Affordable Care Act (2010) The Oregon Health Insurance Experiment. Insurance coverage by type, /13/2016

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1 Affordable Care Act (2010) The Oregon Health Insurance Experment Prmarly desgned to nsurance coverage Kept current system Fll n the holes n current coverage Expand Medcad elgblty Pay or play frms w/ 50+ employees fned f they do not provde health nsurance Indvdual Mandate famles fned for not havng ns. Exchanges markets where ndvduals and small busnesses can purchase group rates 1 2 Insurance coverage by type, 2014 Any nsurance 89.6% Any Prvate 66.0% Employment based 55.4% Drect purchase 14.6% Any government 36.5% Medcare 16.0% Medcad 19.5% Mltary 4.5% Unnsured 10.4% 3 4 1

2 100% Percent Frms Offerng Health Insurance By Establshment Sze, % 99.5% Percent offerng Insurance 80% 60% 40% 20% 28.3% 58.4% 78.2% 0% < Establshment Sze 5 6 Unnsurance rates for adults 18-64, 2014 Research Queston All 14.2 Martal status Marred 10.3 Dvorced 17.1 Separated 24.8 Never marred 18.5 Work experence Full tme/year 11.2 < full year 17.7 Dd not work 17.8 By educaton <HS 38.2 HS grad 17.7 Assocate deg College 8.0 Grad degree 5.1 By ncome <$25K 16.6 $25K, <$50K 14.1 $50K, <$75K 10.7 $75K, <$100K 8.0 $100K What s the elastcty of demand for medcal care? Why mportant? ACA wll expand coverage to mllons Need to know the mpact on Federal and state spendng Problem: People wth nsurance are not a random sample of the populaton so estmatng demand curves dffcult 8 2

3 Some term we mght need Copay a dollar amount a person pays out of pocket for a medcal servce (e.g., $15/vst or $5/prescrpton) Consurance rate fracton of a medcal cost that s pad out of pocket Deductble an amount a person has to pay out of pocket before nsurance kcks n Cross-sectonal regresson y x COINS where : y health care spendng for person x other controls COINS error consurance rate 9 10 RAND Health Ins. Experment Run famles randomly assgned Four stes Dayton, Seattle, MA, SC Four consurance rates 0, 25, 50 and 95% Also HMO comparson w/ 0% consurance 3-5 years Annual Per Capta Medcal Use Hosp Plan Vsts Outpat. $ Admts Hosp $ Total $ Free 4.55 $ $769 $ % 3.33 $ $701 $ % 3.03 $ $846 $ % 2.73 $ $592 $ Real 2005 dollars 12 3

4 $10,000 Real Per Capta Health Expendtures, (2015 $) $9,523 20% 18% Health Expendtures as a Percent of GDP, % $8,000 $8,121 16% 14% 13.2% 15.4% 2015 $ $6,000 $4,000 $2,000 $1,480 $2,563 $3,854 $5,815 % of GDP 12% 10% 8% 6% 4% 5.6% 7.5% 10.0% 2% $ Year 13 0% Year 14 Percent of total spendng 35% 30% 25% 20% 15% 10% 5% 0% 29.5% 10.9% Out of Pocket Source of Funds for Natonal Health Expendtures, 1974 and % 32.7% Prvate health nsurance 11.5% 20.4% 9.5% 16.4% 4.6% 3.7% Medcare Medcad Other Health Insurance Source of Funds % 16.0% Other source 15 % of total spendng 40% 35% 30% 25% 20% 15% 10% 5% 0% 36.5% Hosptal Natonal Health Expendtures by Type of Servce, 1970 and % 26.4% 26.5% Professonal Servces 0.3% 2.7% Home health 5.1% 5.4% Nursng homes 14.2% Retal (Rx, etc.) Type of Servce % 2.7% 1.5% 7.5% 7.0% 3.6% 15.3% Research Structures Other 16 4

5 Oregon Medcad Lottery OHP Plus Serves tradtonal Medcad patents Low ncome pregnant women and chldren, dsabled, famles on welfare OHP Standard Adults aged low ncome but not elgble for publc nsurance Unnsured > 6 months (why) Low assets OHP Standard Comprehensve benefts wth low cost sharng Everythng but vson and non-emergency dental Care provded by managed care groups Annual spendng/year s $3000 Premums based on ncome wth many payng nothng OHP Standard Peak enrollment was 100K n 2002 Stopped takng new enrollees n 2004 due to budget By 2008, attrton reduced plan to 19K State had money to enroll an addtonal 10K Expected hgh demand (90K appled) Used lottery to determne access OHP Standard ~ 36K were selected n the lottery 10K were elgble 60% dd not return forms Rest had quarterly ncome that was too hgh If enrolled, stayed n program ndefntely Need to re-certfy every 6 month

6 Data Demographc and ncome data From applcaton Admnstratve Measures hosptal dscharge Rare (<5%) but 25% of costs Credt reports Able to match 68.5% Data Survey data Measures dr. vsts and health outcomes Only 50% response rate 16 months after notce and 13 months after entry

7 Varable Comparson of means Control Group Mean Control ˆ 1 Group Varable Mean ˆ1 Dfference (std. error) Year of brth (0.10) Female (0.003) Sgned up self (0.0003) Sgned up 1 st day x (0.0025) Dfference (std. error) Gave phone # (0.0028) Address s PO box (0.0027) Lve n a cty? (0.0036) Medan HH ncome n Zp $39, (72.9) LOTTERY Frst stage INSURANCE LOTTERY X V u Intenton to treat Y LOTTERY X V where : INSURANCE 1f have nsurance LOTTERY 1f was offered MEDICAID through lottery X and V controls where : Y measures of health care use LOTTERY 1f was offered MEDICAID through lottery X and V controls

8 β 1 = Use/ Lottery = δ 1 = Medcad/ Lottery = π 1 = β 1 / δ 1 =0.0054/0.256 = Translatng results LATE for outpatent (total use) π 1 = Use/ Lottery = θ 1 = Medcad/ Lottery =0.290 β 1 = π 1 /θ 1 =0.314/0.290 = Q2 Q1 % Q Q1 d % P P2 P1 P Q2 Q1 Q2 Q1 Q2 Q1 2 Q2 Q1 Arc d P2 P1 P2 P1 P2 P1 P2 P

9 Comparson w. RAND (Inpatent) P 2 =0, P 1 =1, so (P 2 -P 1 )/(P 2 +P 1 )=-1 Arc ξ d =ΔQ/(Q 2 +Q 1 )/(-1) ΔQ s LATE Q 1 s wthout nsurance Q 2 =Q 1 + ΔQ Hosptal Q 1 = ΔQ = Q 2 = =0.088 ξ d =-ΔQ/(Q 2 +Q 1 )=-0.021/( )= RAND HIE was Comparson w. RAND (MD vsts) P 2 =0, P 1 =1, so (P 2 -P 1 )/(P 2 +P 1 )=-1 Arc ξ d =ΔQ/(Q 2 +Q 1 )/(-1) ΔQ s LATE Q 1 s wthout nsurance Q 2 =Q 1 + ΔQ Outpatent vsts Q 1 = 1.91 ΔQ = 1.08 Q 2 = =2.99 ξ d =-ΔQ/(Q 2 +Q 1 )=-1.08/( )=-0.22 RAND HIE was

10 Impact of Oregon on Clncal Outcomes 2 nd year followup of the Oregon experment Partcpants Intervewed from 9/09 to 10/10 25 months after the lottery Survey data on health status Anthropomorphc data Blood spots Short form depresson survey Rsky levels for bomarkers Hgh total cholesterol, 240 mg/dl Low HDL, <40 mg/dl Hgh glycated hemoglobn, 6.4% Hgh systolc, 140 mm Hg Hgh dastolc, 90 mm Hg

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