Figure 4. Premium Pass-Through: Impact of $1 Increase in Monthly Payments.

Notes: Figure shows coefficients on distance-to-floor × year interactions from difference-in-differences regressions. The first-stage results displayed in Table 3 indicate that a $1 change in distance-to-floor translates into a $1 change in the monthly payments, so we can interpret the coefficients as the effect of an increase in monthly payments on a dollar-for-dollar basis. The dependent variable is the mean monthly premiums weighted by enrollment in the plan. The unit of observation is the county × year, and observations are weighted by the number of beneficiaries in the county. The county-level measures are constructed using plan-level data weighted by plan enrollment. The sample is the unbalanced panel of county-years with at least one MA plan over years 1997 to 2003. This sample includes 4,262 of 22,001 possible county-years and 64 percent of all Medicare beneficiary-years. Controls are identical to those in Figure 3. The capped vertical bars show 95 percent confidence intervals calculated using standard errors clustered at the county level. Horizontal dashed lines are plotted at the reference values of 0 and −1, where −1 corresponds to 100 percent pass-through.