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13. It is not problematic for the premium instrument to reflect contemporaneous 2005 drug price levels, or even realized prices in 2006. Rather, violation of the exclusion restriction requires a more nuanced correlation, namely that the premium load instrument is correlated with changes in drug prices between 2005 and 2006 through channels other than their Part D enrollment. One possible âcost-basedâ mechanism may be that premiums not only reflect 2005 prices, but also capture negotiated drug prices that insurers expect to pay in 2006. Another possibility is that insurers that aggressively price plans in 2005 to gain market share also more aggressively negotiate unit drug prices in 2006 relative to their negotiations in 2005. While we cannot test this latter mechanism directly, we provide direct evidence against anticipatory costbased premium pricing.
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22. The issue of whether the quality-adjusted premium measure is uncorrelated with expected changes in retail drug prices, before and after the implementation of Part D, is a key issue for validity. In theory, premiums reflect plan design and utilization, drug prices, administrative insurer costs, and premium pricing strategies related to market share. The most obvious threat to the premium instrument is the potential for premiums to reflect changes in prices anticipated by the insurer. Recall that insurers set premiums for their 2006 plans by open enrollment in mid2005.
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1. Private Provision of Social Insurance: Drug-specific Price Elasticities and Cost Sharing in Medicare Part D. (2016). Polyakova, Maria ; Finkelstein, Amy ; Einav, Liran.
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19. How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality. (2015). Ziebarth, Nicolas ; Tauchmann, Harald ; Schmitz, Hendrik ; Bünnings, Christian ; Bunnings, Christian.
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27. Enrollment in Medicare Advantage Plans in Miami-Dade County: Evidence of Status Quo Bias?. (2013). Frank, Richard G. ; Afendulis, Christopher C. ; Sinaiko, Anna D..
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32. Plan selection in Medicare Part D: Evidence from administrative data. (2013). Winter, Joachim ; McFadden, Daniel ; Leive, Adam ; Heiss, Florian.
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33. Suit the action to the word, the word to the action: Hypothetical choices and real decisions in Medicare Part D. (2013). Winter, Joachim ; McFadden, Daniel ; Kesternich, Iris ; Heiss, Florian.
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36. Plan selection in Medicare Part D: Evidence from administrative data. (2012). Winter, Joachim ; McFadden, Daniel ; Leive, Adam ; Heiss, Florian.
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37. In absolute or relative terms? How framing prices affects the consumer price sensitivity of health plan choice. (2012). Ziebarth, Nicolas ; Schmitz, Hendrik.
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38. Plan Selection in Medicare Part D: Evidence from administrative Data. (2012). Winter, Joachim ; McFadden, Daniel ; Leive, Adam ; Heiss, Florian.
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41. Plan Selection in Medicare Part D: Evidence from Administrative Data. (2012). Winter, Joachim ; McFadden, Daniel ; Leive, Adam ; Heiss, Florian.
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42. Remedies for Sick Insurance. (2012). Olivella, Pau ; Noton, Carlos ; McFadden, Daniel.
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43. Suit the action to the word, the word to the action: Hypothetical choices and real decisions in Medicare Part D. (2012). Winter, Joachim ; McFadden, Daniel ; Kesternich, Iris ; Heiss, Florian.
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45. In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice. (2011). Ziebarth, Nicolas ; Schmitz, Hendrik.
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47. Comparison Friction: Experimental Evidence from Medicare Drug Plans. (2011). Mullainathan, Sendhil ; Kling, Jeffrey ; Wrobel, Marian ; Vermeulen, Lee ; Shafir, Eldar.
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48. In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice. (2011). Ziebarth, Nicolas ; Schmitz, Hendrik.
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49. In Absolute or Relative Terms?: How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice. (2011). Ziebarth, Nicolas ; Schmitz, Hendrik.
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50. Heterogeneity in Choice Inconsistencies among the Elderly: Evidence from Prescription Drug Plan Choice. (2011). Gruber, Jonathan ; Abaluck, Jason.
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