How Does Insurance Competition Affect Medical Consumption

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# How Does Insurance Competition Affect Medical Consumption
## Presenter: Conor Ryan
### Discussant: Ian McCarthy
### ASHEcon Annual Meeting, June 21, 2021

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# Medicare

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# Medicare

- Introduced in 1965
- Private Medicare plans authorized in 1972 (started in 1976)
- Medicare + Choice formalized in 1997
- Medicare Advantage and Part D in 2003 (started in 2006)

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# Medicare Advantage Growth

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  ![](images/mma-kff-2020.png)

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# Medicare Advantage Plan Types

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# Medicare Advantage Key Points

1. Huge growth
2. Almost entirely managed care plans now
3. Almost all plans offer prescription drug coverage (90% in 2020)
4. Almost all plans have $0 premium for Part C coverage

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# Bidding Process

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# Final thoughts and questions

- Part C and Part D bidding processes are separate.
- Does the insurer "choose" a premium? Or do they choose a bid?
- Are co-pays set directly or determined after bid submission?
- Where does prescription drug coverage fit here?
- What about the quality rating system? Generates bonuses and extra percentage for rebates.
- Do firms "exploit" inertia in premium and co-payment setting?