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Niedzwiecki, MJ.  Submitted.  The Effect of Health Insurance Coverage on the Demand for Hospital Care: Evidence from a Natural Experiment in Massachusetts. Abstractniedzwiecki_mainsurance_final.pdf

In 2006, the state of Massachusetts mandated insurance coverage, expanded Medicaid eligibility, and provided subsidies for private insurance in an effort to reach universal coverage. The policy change provides a unique natural experiment for identifying the causal effect of health insurance coverage on the utilization of medical services. Using a two-sample instrumental variables approach, we exploit variation in insurance coverage gains across different demographic subgroups and different geographic areas, arising from heterogeneous effects of the policy. The policy increased insurance coverage among adults by 5.64 percentage points overall, and by 13.43 percentage points in the low income adult population not previously eligible for public insurance. Insurance coverage causes emergency room visits to increase by nearly 40%, including the subset of visits during primary care doctors' regular hours. Inpatient admissions increase by about 50% overall, but hospitalizations which originate in the emergency room are unchanged. There is suggestive evidence that inpatient admissions deemed potentially avoidable through regular preventive care decrease, which may indicate better treatment of chronic medical conditions and improved population health. The effects persist more than three years following the reform.

Niedzwiecki, MJ.  2015.  Moral Hazard in Health Insurance: Distortion or Liquidity? Abstract

I exploit the seasonality of the Earned Income Tax Credit, a large transfer to low-income working families, in order to estimate the effect of cash liquidity on the demand for medical care for low-income adults in the United States. I use the estimate to decompose moral hazard into a welfare increasing ``liquidity effect'' and a welfare decreasing ``substitution effect.'' Empirical estimates of the liquidity effect are large. In months when the EITC arrives, individuals are more likely to use any medical care. Visits to the doctor's office, outpatient hospital treatment, and prescription drugs purchase increase, but there is little evidence of an increase in the use of emergency room, inpatient, or dental care. I then use the new empirical estimate to evaluate the net change to social welfare resulting from an expansion of public health insurance like the Affordable Care Act. Estimates suggest that, at the margin, the benefit of increasing public insurance benefits for low-income adults exceeds the cost.

Knepper, M, Niedzwiecki MJ.  2014.  Public Expansions and Private Spillovers: What the 2014 Medicaid Expansions Mean for Private Insurance Markets. Abstractknepper_niedzwiecki_public_expansions_private_spillovers.pdf

In 2012, the Supreme Court upheld the constitutionality of many key provisions in the Affordable Care Act, but unexpectedly allowed states to opt out of the Medicaid public health insurance expansion. The decision not to expand Medicaid incentivizes high-cost individuals who would have enrolled in public insurance to instead enroll in highly subsidized private plans, increasing the expected cost to private insurers. We use the quasi-random variation generated by the Medicaid opt-out to identify how private insurers respond to the accompanying increase in adverse selection pressures, finding that they raise cost-sharing requirements and reduce plan generosity. Our simulations show that state Medicaid expansions generate annual private out-of-pocket savings of $61 per person (3.6% of out-of-pocket spending) over the entire risk pool and $232 per person (6.2% of medical spending) for those in the intermediate range of the spending distribution.

Niedzwiecki, MJ, Baicker K, Wilson M, Cutler D, Obermeyer Z.  2014.  [Preliminary] Patient Sorting Between Emergency Department and Clinic Locations for "Non-Emergent'" Visits.