Selection Stories: Understanding Movement across Health Plans
This study assesses the factors influencing the movement of people across health plans. We distinguish three types of cost-related transitions: adverse selection, the movement of the less healthy to more generous plans; adverse retention, the tendency for people to stay where they are when they get sick; and aging in place, where lack of all movement makes plans with initially older enrollees increase in cost over time. Using data from the Group Insurance Commission in Massachusetts, we show that aging in place and adverse selection are both quantitatively important. Each can materially impact equilibrium enrollments, especially when premiums to enrollees reflect these costs.
|Date of creation:||Jul 2009|
|Date of revision:|
|Contact details of provider:|| Postal: 79 JFK Street, Cambridge, MA 02138|
Web page: http://www.ksg.harvard.edu/research/working_papers/index.htm
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"Adverse Selection in Health Insurance,"
in: Frontiers in Health Policy Research, Volume 1, pages 1-32
National Bureau of Economic Research, Inc.
- Cutler, David M. & Zeckhauser, Richard J., 2000.
"The anatomy of health insurance,"
Handbook of Health Economics,
in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 11, pages 563-643
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"Enrollee Mix, Treatment Intensity, and Cost in Competing Indemnity and HMO Plans,"
NBER Working Papers
7832, National Bureau of Economic Research, Inc.
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- Altman, Daniel & Cutler, David & Zeckhauser, Richard J., 2003. "Enrollee Mix, Treatment Intensity, and Cost in Competing Indemnity and HMO Plans," Scholarly Articles 2664300, Harvard University Department of Economics.
- McClellan, Mark & Cutler, David & Newhous, Joseph P., 2000. "How Does Managed Care Do It?," Scholarly Articles 2643884, Harvard University Department of Economics.
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"Pricing and Welfare in Health Plan Choice,"
07-047, Stanford Institute for Economic Policy Research.
- David M. Cutler & Sarah J. Reber, 1998. "Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection," The Quarterly Journal of Economics, Oxford University Press, vol. 113(2), pages 433-466.
- Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
- Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
- Selden, Thomas M., 1999. "Premium subsidies for health insurance: excessive coverage vs. adverse selection," Journal of Health Economics, Elsevier, vol. 18(6), pages 709-725, December.
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