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Health Care Spending Risk, Health Insurance, and Payment to Health Plans


  • Breyer, Friedrich
  • Bundorf, M. Kate
  • Pauly, Mark V.


This chapter will deal with the actual and efficient functioning of health insurance in settings where risk (expected value) of medical spending or insurance benefits varies across individuals at a given point in time or over time for a given individual. It will deal with equilibrium in insurance markets with risk variation and will also deal with various configurations of information, the impacts on such markets of regulation motivated by risk variation, and the actual and optimal impact of governmental policies to deal with risk variation in national insurance systems.

Suggested Citation

  • Breyer, Friedrich & Bundorf, M. Kate & Pauly, Mark V., 2011. "Health Care Spending Risk, Health Insurance, and Payment to Health Plans," Handbook of Health Economics, Elsevier.
  • Handle: RePEc:eee:heachp:2-691
    DOI: 10.1016/B978-0-444-53592-4.00011-6

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    Cited by:

    1. Kate Ho & Ariel Pakes & Mark Shepard, 2016. "The Evolution of Health Insurer Costs in Massachusetts, 2010-12," NBER Working Papers 22835, National Bureau of Economic Research, Inc.
    2. Lorenz, Normann, 2015. "The interaction of direct and indirect risk selection," Journal of Health Economics, Elsevier, vol. 42(C), pages 81-89.
    3. Mark Shepard, 2016. "Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange," NBER Working Papers 22600, National Bureau of Economic Research, Inc.
    4. repec:kap:revind:v:53:y:2018:i:1:d:10.1007_s11151-018-9623-2 is not listed on IDEAS

    More about this item


    health care spending; health care markets; insurance; public policy; risk variation;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health


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