IDEAS home Printed from https://ideas.repec.org/a/pal/gpprii/v37y2012i4p696-711.html
   My bibliography  Save this article

Why Do Employers Self-insure? New Explanations for the Choice of Self-insurance vs. Purchased Health Insurance

Author

Listed:
  • Roger Feldman

    () (Division of Health Policy and Management, University of Minnesota, 420 Delaware Street, SE, MMC 729 Minneapolis, MN 55455, U.S.A.
    Department of Economics, Carlos III University, Madrid.)

Abstract

This paper proposes that an employer's choice of self-insurance vs. purchased health insurance can be explained by a trade-off between administrator moral hazard, the incentive for third-party administrators to be inefficient managers of self-insured employers’ medical claims and employer moral hazard, the insured employer's failure to invest in reducing health risks among its workers. These explanations have not been analysed in the literature but they are broadly consistent with data and they can explain the increasing popularity of self-insurance over the past 10 years.

Suggested Citation

  • Roger Feldman, 2012. "Why Do Employers Self-insure? New Explanations for the Choice of Self-insurance vs. Purchased Health Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(4), pages 696-711, October.
  • Handle: RePEc:pal:gpprii:v:37:y:2012:i:4:p:696-711
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/gpp/journal/v37/n4/pdf/gpp201223a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: http://www.palgrave-journals.com/gpp/journal/v37/n4/full/gpp201223a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dalton, Christina Marsh & Holland, Sara B., 2015. "Why Do Firms Use Insurance to Fund Worker Health Benefits? The Role of Corporate Finance," MPRA Paper 61952, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:gpprii:v:37:y:2012:i:4:p:696-711. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.palgrave-journals.com/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.