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Regulated Competition in Health Insurance Markets on Two Sides of the Atlantic

Author

Listed:
  • Lukas Kauer
  • Thomas G. McGuire
  • Sonja Schillo
  • Richard C. van Kleef

Abstract

Many high-income countries implement their policy of universal health insurance by individual health insurance in combination with regulated competition among insurers. Supported by public intervention, regulated competition can, in principle, address market failures in health insurance and smooth out some inequities in the financial consequences of ill health and in the ability to pay for health insurance. We compare the national systems in Germany, the Netherlands, and Switzerland to the US Marketplaces, all of which use versions of regulated competition. While they show many similarities (for example, open enrollment, community-rated premiums with subsidies, comprehensive benefit package, risk adjustment), we focus on three major differences and their implications for market functioning: (1) mandatory and universal versus voluntary and partial (applying to only one sector of health insurance); (2) greater or lesser profit orientation of insurers; and (3) reliance on markets or regulation to contain costs.

Suggested Citation

  • Lukas Kauer & Thomas G. McGuire & Sonja Schillo & Richard C. van Kleef, 2026. "Regulated Competition in Health Insurance Markets on Two Sides of the Atlantic," Journal of Economic Perspectives, American Economic Association, vol. 40(2), pages 43-68, Spring.
    • Handle: RePEc:aea:jecper:v:40:y:2026:i:2:p:43-68
    DOI: 10.1257/jep.20251474
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    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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