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CHAPTER 3. MEDIGAP 145
Table 3.5: First Stage: OLS Estimates of Premiums on State and HRR Costs
(1)
Dependent Variable: Log Premium
(2) (3)
Est. SE Est. SE Est. SE
Log state cost 0.5020 (0.0583) 0.5990 (0.0686) 0.5950 (0.0678)
MA penetration rate (%) 0.0004 (0.0018) 0.0000 (0.0018) 0.0001 (0.0019)
MA penetration rate squared (%) 0.0000 (0.0000) 0.0000 (0.0000) 0.0000 (0.0000)
Log HRR cost -0.0005 (0.0266) -0.0020 (0.0252) 0.0003 (0.0248)
Male -0.0052 (0.0060) 0.0045 (0.0084)
Age-65 0.0259 (0.0115) 0.0231 (0.0112)
(Age-65)^2 0.0037 (0.0062) 0.0053 (0.0061)
(Age-65)^3 -0.0007 (0.0009) -0.0010 (0.0008)
Disabled eligibility
Race group
-0.0016 (0.0058) -0.0004 (0.0059)
Asian 0.0149 (0.0141) 0.0121 (0.0134)
Black 0.0097 (0.0118) 0.0114 (0.0116)
Other
Education group
-0.0238 (0.0154) -0.0249 (0.0148)
High school -0.0243 (0.0051) -0.0243 (0.0050)
Less than college -0.0052 (0.0065) -0.0048 (0.0063)
College or more -0.0094 (0.0073) -0.0113 (0.0070)
Log income 0.0007 (0.0028) 0.0011 (0.0028)
Married -0.0104 (0.0050) -0.0102 (0.0053)
Working 0.0026 (0.0054) 0.0015 (0.0055)
Served in armed forces
Self-reported health
0.0136 (0.0064) 0.0122 (0.0067)
Excellent -0.0042 (0.0119)
Very good -0.0134 (0.0110)
Good -0.0137 (0.0095)
Fair -0.0209 (0.0096)
Diagnosis indicators Yes
Treatment indicators Yes
IADL indicators Yes
Year FE Yes Yes Yes
R-squared 25.1% 31.2% 33.2%
N 3,556 3,556 3,556
F-statistic on log state cost 74.01 76.15 76.88
Prob > F 0.00 0.00 0.00
Source: 2000-2005 MCBS; Weiss Ratings; Dartmouth Atlas
Notes: Parameter estimates from OLS regressions of premiums on state- and HRR-level Medicare costs. The sample is restricted to
individuals with Medigap, HMO or no supplemental coverage who turned 65 in 2000 or later. The omitted race group is white,
education group is less than high school, and health status is poor. Standard errors clustered at the state-by-year level in parentheses.