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Partial Outsourcing of Public Programs: Evidence on Determinants of Choice in Medicare

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  • Marika Cabral
  • Colleen Carey
  • Jinyeong Son

Abstract

Many public programs let individuals choose between publicly provided benefits and a subsidized private alternative. We investigate the determinants of health insurance choice in Medicare—a setting with vast geographic variation in the share of individuals selecting the public option versus private alternative. We analyze insurance decisions among individuals who move to quantify the relative importance of individual-specific factors (such as preferences or income) and place-specific factors (such as local health insurance options) on insurance decisions. We find roughly 40% of the geographic variation in the share selecting private coverage is due to place-based factors, while the remainder is explained by individuals. Our findings highlight the importance of individual factors in these decisions and may inform discussions about the use of policy to address geographic disparities.

Suggested Citation

  • Marika Cabral & Colleen Carey & Jinyeong Son, 2023. "Partial Outsourcing of Public Programs: Evidence on Determinants of Choice in Medicare," NBER Working Papers 31141, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31141
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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