Ellen Montz

Ellen Montz

Deputy Administrator and Director of the Center for Consumer Information and Insurance Oversight (CCIIO), Centers for Medicare and Medicaid Services

Dissertation Title:  "Essays in Managed Competition in the Affordable Care Act’s Marketplaces"This dissertation examines different economic principles as they relate to the outcomes of managed competition in insurance markets with a specific focus on the Affordable Care Act’s Marketplaces. The first paper examines one policy in the ACA designed to create competition, the subsidization of market entry for newly-created Consumer Operated and Oriented Plans (COOPs). Using difference-in-differences analysis, I find that in markets where COOP competition exits, premiums increase as a result of the mechanical removal of COOP plans and a competitive plan response. I show that selection is unlikely to explain a large portion of premiums increases. Finally, I show that subsidized and unsubsidized individuals have a different demand response in market with COOP exit.

With coauthors, I then examine consumer choice behavior in the Colorado Marketplace. We investigate consumer price sensitivity, inertia, and churn using longitudinal, individual-level enrollment and plan data from C4 (2014-2016). We find that, on average, consumers are highly price sensitive, but there is large variation in price elasticity by consumer type. Price semi-elasticities are almost twice as large for new enrollees vs. incumbent enrollees, though incumbent enrollees are still relatively more price sensitive than incumbent enrollees have been estimated to be in other health insurance markets. We find evidence of preference heterogeneity, with younger consumers exhibiting much higher levels of price sensitivity than older consumers. Finally, while we find no difference in price sensitivity between subsidized and unsubsidized consumers when focusing on consumer choices across plans within C4, we do find suggestive evidence that premium changes may affect the probability that unsubsidized consumers remain in the market differently than subsidized consumers.

Finally, with coauthors, I examine health plan incentives to limit covered services for mental health and substance use disorders under the risk-adjustment system used in the health insurance Marketplaces. Through a simulation of the program on a population constructed to reflect Marketplace enrollees, we analyzed the cost consequences for plans enrolling people with mental health and substance use disorders. Our assessment points to systematic underpayment to plans for people with these diagnoses. We document how Marketplace risk adjustment does not remove incentives for plans to limit coverage for services associated with mental health and substance use disorders.


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