Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts and Implications for Future Health Reforms

January 19, 2018

Amy Finkelstein (MIT) Nathaniel Hendren (Harvard University) and Mark Shepard (Harvard Kennedy School)

How much are low-income individuals willing to pay for health insurance? What are the implications for insurance market reforms that change government subsidies? Using administrative data from Massachusetts’ subsidized insurance
exchange in 2009-2013, the authors exploit discontinuities in the premium subsidy schedule to estimate willingness to pay and costs of insurance among low-income
adults.

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Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts and Implications for Future Health Reforms