Salpy Kanimian

"Spatial Disparities, Selection, and Segmentation in Health Insurance". JOB MARKET PAPER [This Version: December 2025]

Abstract: Most U.S. means-tested programs use uniform eligibility thresholds that ignore regional cost of living differences. I study whether and how adjusting eligibility thresholds to local cost of living shape selection, sorting, and segmentation in adjacent health insurance markets: Medicaid and health insurance marketplaces. I develop and estimate a model where the regulator sets eligibility rules, insurers compete on price and quality, and consumers choose or are assigned to plans. I find that adjusting eligibility thresholds for cost of living creates competing effects: it improves coverage by crowding low-income families into insurance in high-cost areas, but also reshuffles risk pools across both programs in ways that change premiums and plan quality. Counterfactual simulations using administrative data from California show that partial cost of living indexing yields higher welfare per public dollar than either uniform thresholds or full indexing. These results demonstrate how eligibility design interacts with market structure and insurer incentives in segmented health insurance systems.