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Do health plans risk-select? An audit study on Germany's Social Health Insurance

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  • Bauhoff, Sebastian

Abstract

This paper evaluates whether health plans in Germany's Social Health Insurance select on an easily observable predictor of risk: geography. To identify plan behavior separately from concurrent demand-side adverse selection, I implement a double-blind audit study in which plans are contacted by fictitious applicants from different locations. I find that plans are less likely to respond and follow-up with applicants from higher-cost regions, such as West Germany. The results suggest that supply-side selection may emerge even in heavily regulated insurance markets. The prospect of risk selection by firms has implications for studies of demand-side selection and regulatory policy in these settings.

Suggested Citation

  • Bauhoff, Sebastian, 2012. "Do health plans risk-select? An audit study on Germany's Social Health Insurance," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 750-759.
    • Handle: RePEc:eee:pubeco:v:96:y:2012:i:9:p:750-759
    DOI: 10.1016/j.jpubeco.2012.05.011
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    References listed on IDEAS

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    More about this item

    Keywords

    Health insurance; Risk selection; Risk adjustment; Geographic variations; Germany;
    All these keywords.

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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