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The Role of Agents and Brokers in the Market for Health Insurance

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  • Pinar Karaca-Mandic
  • Roger Feldman
  • Peter Graven

Abstract

Health insurance markets in the United States are characterized by imperfect information, complex products, and substantial search frictions. Insurance agents and brokers play a significant role in helping employers navigate these problems. However, little is known about the relation between the structure of the agent/broker market and access and affordability of insurance. This paper aims to fill this gap by investigating the influence of agents/brokers on health insurance decisions of small firms, which are particularly vulnerable to problems of financing health insurance. Using a unique membership database from the National Association of Health Underwriters together with a nationally representative survey of employers, we find that small firms in more competitive agent/broker markets are more likely to offer health insurance and at lower premiums. Moreover, premiums are less dispersed in more competitive agent/broker markets.

Suggested Citation

  • Pinar Karaca-Mandic & Roger Feldman & Peter Graven, 2013. "The Role of Agents and Brokers in the Market for Health Insurance," Working Papers 13-58, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:13-58
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    File URL: https://www2.census.gov/ces/wp/2013/CES-WP-13-58.pdf
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    References listed on IDEAS

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    Cited by:

    1. Pinar Karaca-Mandic & Jean M. Abraham & Kosali Simon & Roger Feldman, 2013. "Going into the Affordable Care Act: Measuring the Size, Structure, and Performance of the Individual and Small Group Markets for Health Insurance," NBER Chapters, in: Measuring and Modeling Health Care Costs, pages 419-456, National Bureau of Economic Research, Inc.
    2. Hunter, Benjamin M., 2018. "Brokerage in commercialised healthcare systems: A conceptual framework and empirical evidence from Uttar Pradesh," Social Science & Medicine, Elsevier, vol. 202(C), pages 128-135.

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