Three Essays on the Economics of Health Reform.

Abstract

This dissertation presents evaluations of three pre-ACA policies resembling ACA reforms. In the first essay, “Entrepreneurship and job lock: the interaction between tax subsidies and health insurance regulations,” I use variation across states and over time in state-level health insurance regulations and health insurance tax subsidies to show that the effect of a tax subsidy similar to the ACA’s tax credits depends on the type on regulations that affect underwriting. I show that people with pre-existing conditions do not respond to tax subsidies in places where they cannot buy health insurance, but that they respond disproportionately in places where they can buy risk-rated health insurance. Most importantly for the ACA, in states in which people with pre-existing conditions face the same premium as healthy people, tax subsidies have no effect on either group. In the second essay, “How do minimum medical loss ratio rules affect insurance markets? Historical evidence from Michigan,” I use the introduction of a minimum medical loss ratio rule in Michigan to show that a minimum MLR rule results in at least a six percentage point decrease in MLRs among for-profit commercial insurers. The reduction in commercial medical loss ratios was driven by a disproportionate increase in premium revenue. The findings of this paper suggest that the establishment of a minimum MLR rule can result in lower MLRs, possibly because of tacit collusion. Because the minimum MLR rule limits the price of health insurance, it is similar to a price ceiling, which has been shown to result in tacit collusion. In the third essay, “Do Pap smears reduce cervical cancer mortality? Evidence from federal family planning funding,” I use quasi-experimental variation in the availability of subsidized pap smears to estimate the effect of pap smears on cervical cancer mortality. I find that large increases in the likelihood of receiving a Pap smear in the last year do not correspond to changes in cervical cancer mortality or incidence, but the estimates are too imprecise to rule out existing estimates from the literature.