@techreport{NBERw14296,
 title = "The Welfare Impact of Reducing Choice in Medicare Part D: A Comparison of Two Regulation Strategies",
 author = "Claudio Lucarelli and Jeffrey Prince and Kosali Simon",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "14296",
 year = "2008",
 month = "September",
 URL = "http://www.nber.org/papers/w14296",
 abstract = {Motivated by widely publicized concerns that there are “too many” plans, we structurally estimate (and validate) an equilibrium model of the Medicare Part D market to study the welfare impacts of two feasible, similar-sized approaches for reducing choice. One reduces the maximum number of firm offerings regionally; the other removes plans providing donut hole coverage – consumers’ most valued dimension. We find welfare losses are far smaller when coupled with elimination of a dimension of differentiation, as in the latter approach. We illustrate our findings’ relevance under current health care reforms, and consider the merits of instead imposing ex ante competition for entry.},
}