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Themes in the Economics of Aging$
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David A. Wise

Print publication date: 2001

Print ISBN-13: 9780226902845

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226903330.001.0001

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The Sources of Cost Difference in Health Insurance Plans: A Decomposition Analysis

The Sources of Cost Difference in Health Insurance Plans: A Decomposition Analysis

Chapter:
(p.241) 8 The Sources of Cost Difference in Health Insurance Plans: A Decomposition Analysis
Source:
Themes in the Economics of Aging
Author(s):
Matthew Eichner, Mark McClellan, David A. Wise
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226903330.003.0009

Almost two-thirds of Americans under age sixty-five are covered by employer insurance plans. Like Medicare costs, employer medical costs have also risen quickly in recent years, and in many respects, even more dramatic reforms in have occurred in firm health insurance plans than in the Medicare program. Yet research on the consequences of these reforms, including many types of managed care reforms, has been limited. This chapter focuses on the sources of cost differences across plans. The goal is to present a method to summarize information contained in the claims data. In particular, the chapter seeks to describe the sources of cost differences across plans. It considers eight plans that vary in average expenditure for those filing claims, from a low expenditure of $1,645 to a high of $2,484. It then proposes a method to decompose these differences into their component parts. A commentary is also included at the end of the chapter.

Keywords:   employer insurance plans, health care costs, claims data, care reforms

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