Consumer inertia and firm pricing in the medicare part d prescription drug insurance exchange

American Economic Journal: Economic Policy

Volumn 6, Issue 1 B, 2014, Pages 38-64

  Marzilli Ericson, Keith M ^a  

^a BOSTON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84894086931     PISSN: 19457731     EISSN: 1945774X     Source Type: Journal    
DOI: 10.1257/pol.6.1.38     Document Type: Article

References (36)

1. Abaluck, Jason, and Jonathan Gruber. 2011. "Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program." American Economic Review 101 (4): 1180-1210.
2. Brown, Jason, Mark Duggan, Ilyana Kuziemko, and William Woolston. 2011. "How Does Risk Selection Respond to Risk Adjustment? Evidence from the Medicare Advantage Program." National Bureau of Economic Research (NBER) Working Paper 16977.
3. Carroll, Gabriel D., James J. Choi, David Laibson, Brigitte C. Madrian, and Andrew Metrick. 2009. "Optimal Defaults and Active Decisions." Quarterly Journal of Economics 124 (4): 1639-74.
4. Chetty, Raj. 2012. "Bounds on Elasticities With Optimization Frictions: A Synthesis of Micro and Macro Evidence on Labor Supply." Econometrica 80 (3): 969-1018.
5. Chetty, Raj, John N. Friedman, Tore Olsen, and Luigi Pistaferri. 2011. "Adjustment Costs, Firm Responses, and Labor Supply Elasticities: Evidence from Danish Tax Records." Quarterly Journal of Economics 126 (2): 749-804.
6. Choi, James J., David Laibson, Brigitte C. Madrian, and Andrew Metrick. 2004. "For Better or For Worse: Default Effects and 401(k) Savings Behavior." In Perspectives in the Economics of Aging, edited by David Wise, 81-121. Chicago: University of Chicago Press.
7. Decarolis, Francesco. 2012. "Pricing and Incentives in Publicly Subsidized Health Care Markets: The Case of Medicare Part D." Unpublished.
8. Dubé, Jean-Pierre, Günter J. Hitsch, and Peter E. Rossi. 2009. "Do Switching Costs Make Markets Less Competitive?" Journal of Marketing Research 46 (4): 435-45.
9. Duggan, Mark, Patrick Healy, and Fiona Scott Morton. 2008. "Providing Prescription Drug Coverage to the Elderly: America's Experiment with Medicare Part D." Journal of Economic Perspectives 22 (4): 69-92.
10. Duggan, Mark G., and Fiona Scott Morton. 2011. "The Medium-Term Impact of Medicare Part D on Pharmaceutical Prices." American Economic Review 101 (3): 387-92.
11. Ericson, Keith M. Marzilli. 2011. "Forgetting We Forget: Overconfidence and Memory." Journal of the European Economic Association 9 (1): 43-60.
12. Ericson, Keith M. Marzilli. 2012. "Dynamic Default Rules for Inattentive Consumers." Unpublished.
13. Ericson, Keith M. Marzilli. 2014. "Consumer Inertia and Firm Pricing in the Medicare Part D Prescription Drug Insurance Exchange: Dataset." American Economic Journal: Economic Policy. http://dx.doi.org/10.1257/pol.6.1.38.
14. Farrell, Joseph. 1986. "A note on inertia in market share." Economics Letters 21 (1): 73-75.
15. Farrell, Joseph, and Paul Klemperer. 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects." In Handbook of Industrial Organization, Vol. 3, edited by Mark Armstrong and Robert H. Porter, 1967-2072. Amsterdam: Elsevier.
16. Farrell, Joseph, and Carl Shapiro. 1988. "Dynamic Competition with Switching Costs." RAND Journal of Economics 19 (1): 123-37.
17. Gruber, Jonathan, and Ebonya Washington. 2005. "Subsidies to employee health insurance premiums and the health insurance market." Journal of Health Economics 24 (2): 253-76.
18. Handel, Benjamin R. 2011. "Adverse Selection and Switching Costs in Health Insurance Markets: When Nudging Hurts." National Bureau of Economic Research (NBER) Working Paper 17459.
19. Heiss, Florian, Daniel McFadden, and Joachim Winter. 2007. "Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans." National Bureau of Economic Research (NBER) Working Paper 13627.
20. Hoadley, Jack, Juliette Cubanski, Elizabeth Hargrave, Laura Summer, and Tricia Neuman. 2009. Medicare Part D Spotlight: Part D Plan Availability in 2010 and Key Changes Since 2006. Kaiser Family Foundation Issue Brief 7986. Menlo Park, CA, November.
21. Hsu, John, Vicki Fung, Jie Huang, Mary Price, Richard Brand, Rita Hui, Bruce Fireman, William Dow, John Bertko, and Joseph Newhouse. 2010. "Fixing Flaws In Medicare Drug Coverage That Prompt Insurers To Avoid Low-Income Patients." Health Affairs 29 (12): 2335-43.
22. Imbens, Guido, and Karthik Kalyanaraman. 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator." Review of Economic Studies 79 (3): 933-59.
23. Jones, Damon. 2012. "Inertia and Overwithholding: Explaining the Prevalence of Income Tax Refunds." American Economic Journal: Economic Policy 4 (1): 158-85.
24. Ketcham, Jonathan, Claudio Lucarelli, Eugenio Miravete, and M. Christopher Roebuck. 2012. "Sinking, Swimming, or Learning to Swim in Medicare Part D." American Economic Review 102 (6): 2639-73.
25. Kling, Jeffrey R., Sendhil Mullainathan, Eldar Shafir, Lee C. Vermeulen, and Marian V. Wrobel. 2012. "Comparison Friction: Experimental Evidence from Medicare Drug Plans." Quarterly Journal of Economics 127 (1): 199-235.
26. Lakdawalla, Darius N., and Wesley Yin. 2010. "Insurers' Negotiating Leverage and the External Effects of Medicare Part D." National Bureau of Economic Research (NBER) Working Paper 16251.
27. Levinson, Daniel. 2008. Centers for Medicare & Medicaid Services Audits of Medicare Part D Bids. U.S. Department of Health and Human Services Office of Inspector General. Washington, DC, November.
28. Levinson, Daniel. 2009. Midyear Formulary Changes in Medicare Prescription Drug Plans. U.S. Department of Health and Human Services Office of Inspector General. Washington, DC, December.
29. Madrian, Brigitte C., and Dennis F. Shea. 2001. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior." Quarterly Journal of Economics 116 (4): 1149-87.
30. McCrary, Justin. 2008. "Manipulation of the running variable in the regression discontinuity design: A density test." Journal of Econometrics 142 (2): 698-714.
31. Medicare Payment Advisory Commission. 2010. "Status Report on Part D." In Report to the Congress: Medicare Payment Policy, 281-306. Washington, DC, March. www.medpac.gov/chapters/Mar10_ Ch05.pdf (accessed December 2, 2013).
32. O'Donoghue, Ted, and Matthew Rabin. 2001. "Choice and Procrastination." Quarterly Journal of Economics 116 (1): 121-60.
33. Robst, John, Jesse Levy, and Melvin Ingber. 2007. "Diagnosis-based risk adjustment for medicare prescription drug plan payments." Health Care Financing Review 28 (4): 15-30.
34. Samuelson, William, and Richard Zeckhauser. 1988. "Status quo bias in decision making." Journal of Risk & Uncertainty 1 (1): 7-59.
35. Strombom, Bruce, Thomas Buchmueller, and Paul Feldstein. 2002. "Switching costs, price sensitivity and health plan choice." Journal of Health Economics 21 (1): 89-116.
36. Taylor, Curtis R. 2003. "Supplier Surfing: Competition and Consumer Behavior in Subscription Markets." RAND Journal of Economics 34 (2): 223-46.