000			01234nam a22001457a 4500
999			_c514665 _d514665
008			201126b ||||| |||| 00| 0 eng d
100			_aJaffe, Sonia. and Shepard, Mark. _921522
245			_aPrice-linked subsidies and imperfect competition in health insurance
260			_aAmerican Economic Journal Economic Policy
300			_a12(3), Aug, 2020: p.279-311
520			_aPolicymakers subsidizing health insurance often face uncertainty about future market prices. We study the implications of one policy response: linking subsidies to prices to target a given postsubsidy premium. We show that these price-linked subsidies weaken competition, raising prices for the government and/or consumers. However, price-linking also ties subsidies to health care cost shocks, which may be desirable. Evaluating this tradeoff empirically, using a model estimated with Massachusetts insurance exchange data, we find that price-linking increases prices 1–6 percent, and much more in less competitive markets. For cost uncertainty reasonable in a mature market, these losses outweigh the benefits of price-linking. – Reproduced
773			_aAmerican Economic Journal Economic Policy
906			_aHEALTH INSURANCE
942			_cAR