{"title":"Multimarket Contact in Health Insurance: Evidence from Medicare Advantage*","authors":"Haizhen Lin, Ian M. McCarthy","doi":"10.1111/joie.12318","DOIUrl":null,"url":null,"abstract":"<p>Many industries consist of large firms that compete in multiple geographic markets. Such overlap, defined as multimarket contact (MMC), may facilitate tacit collusion and soften competition. We examine the effects of MMC on health insurance prices and quality using comprehensive data on the Medicare Advantage (MA) market from 2008 through 2015. Our identification strategy exploits two plausibly exogenous changes to MMC: (1) out-of-market mergers; and (2) policy-driven changes in the benchmark rates of other markets. Our results consistently support the mutual forbearance hypothesis, where we find that prices are significantly higher and high-quality plans less pervasive as MMC increases.</p>","PeriodicalId":47963,"journal":{"name":"Journal of Industrial Economics","volume":null,"pages":null},"PeriodicalIF":1.7000,"publicationDate":"2023-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Industrial Economics","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/joie.12318","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Many industries consist of large firms that compete in multiple geographic markets. Such overlap, defined as multimarket contact (MMC), may facilitate tacit collusion and soften competition. We examine the effects of MMC on health insurance prices and quality using comprehensive data on the Medicare Advantage (MA) market from 2008 through 2015. Our identification strategy exploits two plausibly exogenous changes to MMC: (1) out-of-market mergers; and (2) policy-driven changes in the benchmark rates of other markets. Our results consistently support the mutual forbearance hypothesis, where we find that prices are significantly higher and high-quality plans less pervasive as MMC increases.
期刊介绍：
First published in 1952, the Journal of Industrial Economics has a wide international circulation and is recognised as a leading journal in the field. It was founded to promote the analysis of modern industry, particularly the behaviour of firms and the functioning of markets. Contributions are welcomed in all areas of industrial economics including: - organization of industry - applied oligopoly theory - product differentiation and technical change - theory of the firm and internal organization - regulation - monopoly - merger and technology policy Necessarily, these subjects will often draw on adjacent areas such as international economics, labour economics and law.
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