Selection in Health Insurance Markets and Its Policy Remedies.
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ABSTRACT:
SUBMITTER: Geruso M
PROVIDER: S-EPMC10898225 | biostudies-literature | 2017
REPOSITORIES: biostudies-literature
Publications
Selection in Health Insurance Markets and Its Policy Remedies.
Geruso Michael M Layton Timothy J TJ
The journal of economic perspectives : a journal of the American Economic Association 20170101 4
Similar Datasets
Project description:We study the welfare effects of offering choice over coverage levels-"vertical choice"-in regulated health insurance markets. We emphasize that heterogeneity in efficient coverage level is not sufficient to motivate choice. When premiums cannot reflect individuals' costs, it may not be in consumers' best interest to select their efficient coverage level. We show that vertical choice is efficient only if consumers with higher willingness-to-pay have a higher efficient level of coverage. We investigate this condition empirically and find that as long as a minimum coverage level can be enforced, the welfare gains from vertical choice are either zero or economically small.
| S-EPMC8782442 | biostudies-literature
Project description:While family purchase of health insurance may benefit insurance markets by pooling individual risk into family groups, the correlation across illness types in families could exacerbate adverse selection. We analyze the impact of family pooling on risk for health insurers to inform policy about family-level insurance plans. Using data on 8,927,918 enrollees in fee-for-service commercial health plans in the 2013 Truven MarketScan database, we compare the distribution of annual individual health spending across four pooling scenarios: (1) "Individual" where there is no pooling into families; (2) "real families" where costs are pooled within families; (3) "random groups" where costs are pooled within randomly generated small groups that mimic families in group size; and (4) "the Sims" where costs are pooled within random small groups which match families in demographics and size. These four simulations allow us to identify the separate contributions of group size, group composition, and family affinity in family risk pooling. Variation in individual spending under family pooling is very similar to that within "simulated families" and to that within random groups, and substantially lower than when there is no family pooling and individuals choose independently (standard deviation $12,526 vs $11,919, $12,521 and $17,890 respectively). Within-family correlations in health status and utilization do not "undo" the gains from family pooling of risks. Family pooling can mitigate selection and improve the functioning of health insurance markets.
| S-EPMC5796434 | biostudies-literature
Project description:BackgroundDespite sophisticated risk equalization, insurers in regulated health insurance markets still face incentives to attract healthy people and avoid the chronically ill because of predictable differences in profitability between these groups. The traditional approach to mitigate such incentives for risk selection is to improve the risk-equalization model by adding or refining risk adjusters. However, not all potential risk adjusters are appropriate. One example are risk adjusters based on health survey information. Despite its predictiveness of future healthcare spending, such information is generally considered inappropriate for risk equalization, due to feasibility challenges and a potential lack of representativeness.MethodsWe study the effects of high-risk pooling (HRP) as a strategy for mitigating risk selection incentives in the presence of sophisticated- though imperfect- risk equalization. We simulate a HRP modality in which insurers can ex-ante assign predictably unprofitable individuals to a 'high risk pool' using information from a health survey. We evaluate the effect of five alternative pool sizes based on predicted residual spending post risk equalization on insurers' incentives for risk selection and cost control, and compare this to the situation without HRP.ResultsThe results show that HRP based on health survey information can substantially reduce risk selection incentives. For example, eliminating the undercompensation for the top-1% with the highest predicted residual spending reduces selection incentives against the total group with a chronic disease (60% of the population) by approximately 25%. Overall, the selection incentives gradually decrease with a larger pool size. The largest marginal reduction is found moving from no high-risk pool to HRP for the top 1% individuals with the highest predicted residual spending.ConclusionOur main conclusion is that HRP has the potential to considerably reduce remaining risk selection incentives at the expense of a relatively small reduction of incentives for cost control. The extent to which this can be achieved, however, depends on the design of the high-risk pool.
| S-EPMC10913588 | biostudies-literature
Project description:OBJECTIVE:To investigate the effects of local labor market conditions and the availability of employer-sponsored health insurance on exits from the Medicaid program. DATA SOURCE:Data for this project come from a unique administrative database containing a 2 percent sample of all cases on California's Medicaid program in 1987 and a 2 percent sample of all new cases starting each year between 1987 and 1995. STUDY DESIGN:The results are estimated using a discrete duration model where the monthly exit probability is a function of demographic characteristics, local labor market variables, the probability of having employer-sponsored insurance, and fixed year and county effects. PRINCIPAL FINDINGS:Improvements in labor market opportunities (i.e., employment growth, wage growth, and increases in the availability of employer-sponsored health insurance) promote exits off the Medicaid program. A 2.5 percentage point increase in the availability of employer-sponsored insurance leads to a 6 percent increase in the probability that a completed spell lasts no more than 2 years. It would take a 2 percentage point decrease in unemployment rates or a 10 percent increase in average quarterly earnings to yield an equivalent increase in the likelihood of exiting Medicaid within 2 years. These effects are robust to the inclusion of county-level fixed effects and time effects. CONCLUSIONS:Medicaid expenditures and caseloads are sensitive to local economic fluctuations and secular trends in the availability of health insurance. Continued decreases in employer-based health insurance coverage will greatly increase the demand for public insurance coverage and the financial pressures on state governments.
| S-EPMC1955304 | biostudies-other
Project description:ObjectiveAccess to specialty mental health care may be poor because many psychiatrists do not accept health insurance reimbursement, whereas many patients rely on insurance to help pay for care. The objective of this study was to examine the extent of participation in private insurance by licensed psychiatrists.MethodsUsing 2013 Massachusetts licensing data and the All-Payer Claims Database (APCD), the authors performed a cross-sectional analysis of licensed psychiatrists in Massachusetts. The fraction of psychiatrists who filed insurance claims, number of unique patients with insurance claims per psychiatrist, and physician characteristics associated with insurance participation were evaluated.ResultsIn 2013, Massachusetts had 2,348 licensed psychiatrists. Overall, 79% (N=1,843) had at least one paid claim for an outpatient visit in the APCD, but only 6% (N=151) had claims for at least 300 patients per year (a full caseload). Psychiatrists had a median of 18 patients with claims (mean=73). Compared with psychiatrists 30-39 years since medical school graduation, those within 19 years since graduation were less likely to bill for an outpatient (7-19 years, odds ratio [OR]=0.67, 95% confidence interval [CI]=0.47-0.94) and less likely to have claims for ≥300 patients per year (7-19 years, OR=0.49, 95% CI=0.29-0.83). Participation varied across insurance types (93% for group commercial plans versus 33% for Medicaid managed care plans).ConclusionsAmong Massachusetts psychiatrists, participation in the private insurance market appears to be limited. Older psychiatrists are more likely to participate, and patients' access to psychiatrists who accept insurance could worsen as these psychiatrists retire.
| S-EPMC7708395 | biostudies-literature
Project description:Our article deals with pricing strategies in Swiss health insurance markets and focuses on the relationship between basic and supplementary insurance. We analyzed how firms' pricing strategies (i.e., pricing of basic and supplementary products) can create switching costs in basic health insurance markets, thereby preventing competition in basic insurance from working properly. More specifically, using unique market and survey data, we investigated whether firms use bundling strategies or supplementary products as low-price products to attract and retain basic insurance consumers. To our knowledge, this is the first paper to analyze these pricing strategies in the context of insurance/health insurance. We found no evidence of bundling in the Swiss setting. We did however observe that firms used low-price supplementary products that contributed to lock in consumers. A majority of firms offered at least one of such product at a low price. None offered low-price products in both basic and supplementary markets. Low-price insurance products differed across firms. When buying a low-price supplementary product, consumers always bought their basic contract from the same firm. Furthermore, those who opted for low-price supplementary products were less likely to declare an intention to switch basic insurance firms in the near future. This result was true for all risk category levels.
| S-EPMC7496908 | biostudies-literature
Project description:Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive margin (which plan to buy). We present a new graphical theoretical framework that extends a workhorse model to incorporate both selection margins simultaneously. A key insight from our framework is that policies aimed at addressing one margin of selection often involve an economically meaningful trade-off on the other margin in terms of prices, enrollment, and welfare. Using data from Massachusetts, we illustrate these trade-offs in an empirical sufficient statistics approach that is tightly linked to the graphical framework we develop.
| S-EPMC10181796 | biostudies-literature
Project description:BACKGROUND: The Australian Private Health Insurance Incentive (PHII) policy reforms implemented in 1997-2000 increased PHI membership in Australia by 50%. Given the higher rate of obstetric interventions in privately insured patients, the reforms may have led to an increase in surgical deliveries and deliveries with longer hospital stays. We aimed to investigate the effect of the PHII policy introduction on birth characteristics in Western Australia (WA). METHODS AND FINDINGS: All 230,276 birth admissions from January 1995 to March 2004 were identified from administrative birth and hospital data-systems held by the WA Department of Health. Average quarterly birth rates after the PHII introduction were estimated and compared with expected rates had the reforms not occurred. Rate and percentage differences (including 95% confidence intervals) were estimated separately for public and private patients, by mode of delivery, and by length of stay in hospital following birth. The PHII policy introduction was associated with a 20% (-21.4 to -19.3) decrease in public birth rates, a 51% (45.1 to 56.4) increase in private birth rates, a 5% (-5.3 to -5.1) and 8% (-8.9 to -7.9) decrease in unassisted and assisted vaginal deliveries respectively, a 5% (-5.3 to -5.1) increase in caesarean sections with labour and 10% (8.0 to 11.7) increase in caesarean sections without labour. Similarly, birth rates where the infant stayed 0-3 days in hospital following birth decreased by 20% (-21.5 to -18.5), but rates of births with >3 days in hospital increased by 15% (12.2 to 17.1). CONCLUSIONS: Following the PHII policy implementation in Australia, births in privately insured patients, caesarean deliveries and births with longer infant hospital stays increased. The reforms may not have been beneficial for quality obstetric care in Australia or the burden of Australian hospitals.
| S-EPMC3402394 | biostudies-other
Project description:Various countries have implemented a choice-based health insurance system. For such systems to function as intended, it is crucial that all citizens have the opportunity to make well-informed decisions with regard to their health insurance policy. There is, however, ample research evidence to suggest that many citizens may lack the required skills to do so, thus increasing the likelihood of suboptimal insurance choices and incurring unexpected costs. The current study explored what barriers citizens in the Netherlands, with low health insurance literacy (HIL), face when selecting a health insurance policy, and what their specific needs and preferences are regarding information and support. Semi-structured interviews (online or telephone) were performed between January 2023 and April 2023 among sixteen with a low level of HIL. The data were analyzed using thematic analysis methods. Our results show that not all citizens with low HIL are sufficiently motivated to actively look for alternative health insurance options every year. This is partly due to the feeling that it is a task imposed upon them by the government, and because choosing a health insurance policy is perceived as too complicated and not sufficiently worthwhile. There is a need among citizens with low HIL for clear and practical information about health insurance policies, especially from the government and health insurers. In addition to this need, we recommend enhancing awareness regarding the consequences of neglecting to explore such health insurance options. Moreover, more personal attention for the process of selecting a health insurance policy should be offered to vulnerable groups such as those who possess insufficient digital skills.
| S-EPMC11654150 | biostudies-literature
Project description:ObjectiveTo examine the effects of hospital and insurer markets concentration on transaction prices for inpatient hospital services.Data sourcesMeasures of hospital and insurer markets concentration derived from American Hospital Association and HealthLeaders-InterStudy data are linked to 2005-2008 inpatient administrative data from Truven Health MarketScan Databases.Study designUses a reduced-form price equation, controlling for cost and demand shifters and accounting for possible endogeneity of market concentration using instrumental variables (IV) technique.Principal findingsThe findings suggest that greater hospital concentration raises prices, whereas greater insurer concentration depresses prices. A hypothetical merger between two of five equally sized hospitals is estimated to increase hospital prices by about 9 percent (p < .001). A similar merger of insurers would depress prices by about 15.3 percent (p < .001). Over the 2003-2008 periods, the estimates imply that hospital consolidation likely raised prices by about 2.6 percent, while insurer consolidation depressed prices by about 10.8 percent. Additional analysis using longer panel data and applying hospital fixed effects confirms the impact of hospital concentration on prices.ConclusionThe findings provide support for strong antitrust enforcement to curb rising hospital service prices and health care costs.
| S-EPMC5867178 | biostudies-literature