Sarah Kotb
Dissertation Title: "The Design of Public Health Insurance Programs and the Welfare of Low-Income Groups"
In the 1920s, health insurance in the United States was a fringe benefit covering only a few employee groups and limited to a few hospital benefits. Since then, it has substantially evolved to become the primary way that the vast majority of Americans receive affordable healthcare. Despite these gains in access, the system that is currently in place is fragmented and replete with public and private actors behaving under poorly understood incentives. How low-income groups fare in these conditions is the subject of this dissertation. The first two chapters examine supply-side features of public insurance programs like Medicaid and Medicare whereas the third chapter examines how outside options for coverage like community health clinics impact the demand for health insurance coverage.
Chapter 1 - Separated at Birth: The Fragmentation of Health Insurance and Underinvestment in Preventative Care
Health insurance in the United States is fragmented. Americans, and especially low-income groups, receive their insurance coverage through numerous plans throughout their lives and even at one point in time, their coverage benefits can be outsourced to different insurers. This study presents empirical, causal evidence showing that such fragmentation reduces the incentives for any one plan to invest in preventative health. Specifically, I study a policy in New York's Medicaid that carved out very low birthweight newborns from the responsibilities of private plans and placed them under the public state insurance program. Once the carve-out ended in 2012 and private plans became liable for the costs of very low birthweight newborns, pregnant enrollees covered by these plans experienced more preventative care that is specifically targeted towards monitoring and reducing the risk of preterm and low birthweight newborns. These increases were above and beyond secular changes in care experienced by pregnant enrollees in the public program. Moreover, the largest gains appear among African American enrollees who exhibit a disproportionately high risk of delivering a preterm and a low birthweight newborn, suggesting that the fragmented regime had not just under-allocated prevention but also misallocated it.
Chapter 2 - Social Risk Adjustment: Evidence from Medicare (With Tim Layton and Mark Shephard)
One in four people in the United States has health insurance that is funded by public taxes and administered by private insurance. The amount of funding that private insurers receive is typically adjusted on the health of the enrollee where sicker enrollees bring in higher revenues. This paper examines the prospects for a new regime that risk adjusts insurer payment on the health as well as the socioeconomic characteristics of the enrollees. Specifically, we study a reform in Medicare's risk adjustment system in 2017, where private Medicare Advantage plans started receiving an additional $862 annually---about 7% of their baseline revenues---for each low-income beneficiary they enroll. We find no evidence that the policy expanded the market for low-income individuals, either by generating new plan entry in low-income areas or by attracting low-income beneficiaries to existing plans. Among those already enrolled in Medicare Advantage, plans modestly expanded the lightly regulated coverage of supplemental benefits. However, these changes did not extend to other domains such as prescription drug coverage, formulary generosity, or plan quality ratings. Taken together, our findings suggest the reform did little to deliver meaningful improvements for the intended beneficiaries.
Chapter 3 - The Value of Federally Qualified Health Centers (with Amanda Su)
Over the last sixty years, Federally Qualified Health Centers (FQHCs) have provided primary care to low-income populations, with earlier studies documenting large health improvements following their initial rollout. This paper revisits the impact of FQHCs in the context of modern healthcare policy—characterized by expanded insurance options and a changing public health landscape. Using the staggered timing of FQHC clinical site openings between 2005 and 2019 and a difference-in-differences design, we find that a first FQHC opening in a county continues to reduce mortality risk without eroding private insurance coverage. In contrast to the earlier clinic openings in the 60s and 70s where effects were caused by chronic disease management, recent mortality declines appear driven by reductions in deaths from mental and behavioral disorders and are concentrated among older adults, non-Hispanic white individuals, and men. Taken together, our findings highlight the continued value of FQHCs as a health-focused safety net investment, even in an era of expanded formal coverage.