New Study Examines Lessons From Massachusetts Health Insurance Exchanges

A new study examines Massachusetts’ experience with health insurance exchanges and finds that 1) insurance take-up declines as subsidies decline, 2) adverse selection occurs, and 3) uncompensated care appears to play in role in insurance enrollment rates and appears to benefit providers of uncompensated care.

The study, Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts and Implications for Future Health Reforms, was authored by Amy Finkelstein of MIT, Nathaniel Hendren of Harvard University, and Mark Shepard of Harvard Kennedy School.

These findings suggest that health care reforms that reduce subsidies will result in decreased enrollment, a sicker risk pool, and declining coverage rates for low income populations.

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

About the Authors

Amy Finkelstein is the John & Jennie S. MacDonald Professor of Economics at the Massachusetts Institute of Technology. She has received numerous awards and fellowships including the John Bates Clark Medal (2012). She is one of the two Principal Investigators for the Oregon Health Insurance Experiment, a randomized evaluation of the impact of extending Medicaid coverage to low-income, uninsured adults. She earned her AB from Harvard University, an M.Phil in Economics from Oxford University as a Marshall School, and a PhD in Economics from MIT in 2001.

Nathaniel Hendren is a Professor of Economics at Harvard University and a Faculty Research Fellow at the National Bureau of Economic Research. His work lies at the intersection of theoretical and empirical work in public economics, focusing on a range of topics including insurance markets, welfare measurement government policies, and intergenerational mobility. He earned a BS in mathematics and economics from the University of Chicago, and a PhD in economics from the Massachusetts Institute of Technology.

Mark Shepard is an economist and an assistant professor at Harvard Kennedy School of Government. His main research studies health insurance markets and competition, particularly in public programs for low-income people. He has written several papers studying Massachusetts’ pioneer health insurance exchange and is engaged in ongoing work studying Medicaid managed care programs. He received his PhD in economics from Harvard University in 2015.

About the Rappaport Institute for Greater Boston

The Rappaport Institute for Greater Boston at Harvard’s Kennedy School of Government strives to improve the region’s governance by attracting young people to serve the region, working with scholars to produce new ideas about important issues, and stimulating informed discussions that bring together scholars, policymakers, and civic leaders. The Rappaport Institute was founded and funded by the Phyllis and Jerome Lyle Rappaport Foundation, which promotes emerging leaders in Greater Boston.