• AEA in the news
  • May 8, 2017

How insurers favor lower cost Medicare patients

The New York Times cited a paper in AEJ: Policy that studied how insurers favor patients with certain diagnoses.

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The Upshot column in The New York Times cited a paper that appeared in the February issue of the American Economic Journal: Economic Policy in an article about how a Medicare drug incentive program actually led to increased hospitalizations for some patients. The paper by Cornell University researcher Colleen Carey showed how insurers designed Medicare Part D benefit plans to dissuade high-cost patients from using their drug benefits. She found that insurers designed more favorable benefits (i.e. lower out-of-pocket costs) for patients with conditions that were more profitable to insure because of the availability of cheaper generic drugs.