Market inefficiency, insurance mandate and welfare: U.S. health care reform 2010

dc.contributor.authorJung, Juergen
dc.contributor.authorTran, Chung
dc.contributor.departmentTowson University. Department of Economicsen_US
dc.date.accessioned2018-05-15T17:12:02Z
dc.date.available2018-05-15T17:12:02Z
dc.date.issued2014-09
dc.date.updated2016-02-05
dc.description.abstractWe quantify the effects of the Affordable Care Act (ACA) using a stochastic general equilibrium overlapping generations model with endogenous health capital accumulation calibrated to match U.S. data on health spending and insurance take-up over the lifecycle. We find that the introduction of an insurance mandate and the expansion of Medicaid which are at the core of the ACA increase the insurance take-up rate of workers to almost universal coverage but decrease capital accumulation, labor supply and aggregate output. Penalties for not having insurance as well as subsidies to assist low income individuals’ purchase of insurance via health insurance market places do reduce the adverse selection problem in private health insurance markets and do counteract the crowding-out effect of the Medicaid expansion. The redistributional measures embedded in the ACA result in welfare gains for low income individuals in poor health and welfare losses for high income individuals in good health. The overall welfare effect depends on the size of the ex-post moral hazard effect, tax distortions and general equilibrium price adjustments.en_US
dc.description.urihttps://ideas.repec.org/p/tow/wpaper/2014-01.htmlen_US
dc.formatapplication/pdf
dc.format.extent52 pagesen_US
dc.genreworking papersen_US
dc.identifierdoi:10.13016/M2SQ8QM38
dc.identifier.citationJuergen Jung & Chung Tran, 2014. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," Working Papers 2014-01, Towson University, Department of Economics, revised Jan 2016.en_US
dc.identifier.otherJEL: H51
dc.identifier.otherJEL: I18
dc.identifier.otherJEL: I38
dc.identifier.otherJEL: E21
dc.identifier.otherJEL: E62
dc.identifier.urihttp://hdl.handle.net/11603/10752
dc.language.isoen_USen_US
dc.publisherTowson University. Department of Economicsen_US
dc.relation.isAvailableAtTowson University
dc.relation.ispartofseriesTowson University Department of Economics Working Paper Series;2014-01
dc.subjectUnited States. Patient Protection and Affordable Care Acten_US
dc.subjectInsurance mandateen_US
dc.subjectMedicaiden_US
dc.subjectGrossman health capitalen_US
dc.subjectLifecycle health spending and financingen_US
dc.subjectDynamic stochastic general equilibriumen_US
dc.subjectEquilibrium (Economics)en_US
dc.titleMarket inefficiency, insurance mandate and welfare: U.S. health care reform 2010en_US
dc.typeTexten_US

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