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. Author manuscript; available in PMC: 2024 Jan 11.
Published in final edited form as: Am Econ Rev. 2018 Aug;108(8):2048–2087.

Table 7—

Selection: Impact of $50 Increase in Monthly Payments

MA enrollment (%) TM costs ($) MA risk adjustment payment ($) Mean premiums* ($) Implied pass-through with selection (ρ)
(1) (2) (3) (4) (5)
Panel A. Yearly BIPA effect
Δb×2001 0.86 −3.05 −1.36 −0.32 1.07
(0.60) (1.67) (0.48) (0.05) (0.17)
Δb×2002 3.32 −0.88 −2.42 −0.48 0.90
(0.83) (3.41) (0.59) (0.06) (0.13)
Δb×2003 4.74 3.54 −3.43 −0.43 0.72
(0.90) (3.73) (0.81) (0.07) (0.10)
Panel B. Pooled post-BIPA effect
Δb × post-BIPA 3.29 −0.05 −2.83 −0.47 0.85
(0.71) (2.80) (0.59) (0.05) (0.09)
Panel C. Controls: all panels
Main effects
County fixed effects X X X X
Year fixed effects X X X X
Pre-BIPA mean of dependent variable 30.19 483.32 484.25 12.38

Notes: Columns 1 through 4 show coefficients on distance-to-floor × year interactions from difference-in-differences regressions. Although the estimation includes distance-to-floor interactions for all the available years in our sample, we display coefficients for the post-reform years (2001–2003) above for brevity. 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. In columns 1 to 3, the coefficient on distance-to-floor is scaled by $50. The unit of observation is the county × year, and observations are weighted by the number of beneficiaries in the county. The sample is the unbalanced panel of county-years with at least one MA plan over years 1999 to 2003. This sample includes 2,892 of 15,715 possible county-years and 63 percent of all Medicare beneficiaries. Year 2000, which is the year prior to BIPA implementation, is the omitted category. Controls are identical to those in Table 3. All monetary values are inflation adjusted to 2000 using the CPI-U. Robust standard errors clustered at the county level are reported in parentheses. Column 5 reports the implied pass-through in a perfectly competitive market based on the estimates in the corresponding row (see Section V for more details). Standard errors for this implied pass-through estimate are calculated by the bootstrap method using 200 iterations.

*

Impact of $1 increase in monthly payments shown in column 4.