Let Them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange

2013 ◽  
Vol 5 (1) ◽  
pp. 32-58 ◽  
Author(s):  
Leemore Dafny ◽  
Kate Ho ◽  
Mauricio Varela
Keyword(s):  
Health Insurance ◽  
Health Plans ◽  
Costs And Benefits ◽  
Welfare Gain ◽  
Large Group

Most nonelderly Americans purchase health insurance through their employers, which sponsor a limited number of plans. Using a panel dataset representing over ten million insured lives, we estimate employees' preferences for different health plans and use the estimates to predict their choices if more plans were made available to them on the same terms, i.e., with equivalent subsidies and at large-group prices. Using conservative assumptions, we estimate a median welfare gain of 13 percent of premiums. A proper accounting of the costs and benefits of a transition from employer-sponsored to individually-purchased insurance should include this nontrivial gain. (JEL G22, I13, J32)

Uncertainty and health insurance

2017 ◽  
Author(s):  
Jan Abel Olsen
Keyword(s):  
Health Insurance ◽  
Excess Demand ◽  
Financial Protection ◽  
Insurance Plan ◽  
Welfare Gain ◽  
Health Insurance Plan ◽  
Insurance Contracts ◽  
Efficiency Losses ◽  
Potential Efficiency

This chapter seeks to explain why most people prefer to have a health insurance plan. Two types of uncertainty give rise to the demand for financial protection: people do not know if they will ever come to need healthcare, and they do not know the full financial implications of illness. Health insurance would take away—or at least reduce—such financial uncertainties associated with future illnesses. A model is presented to show the so-called welfare gain from health insurance. This is followed by an investigation into the potential efficiency losses of health insurance, due to excess demand for services. In the last section, a different efficiency problem is discussed: when people have an incentive to signal ‘false risks’, this can lead to there being no market for insurance contracts which reflect ‘true risks’.

Impact of Health Plan Deductibles and Health Insurance Marketplace Enrollment on Health Care Experiences

2018 ◽  
Vol 77 (5) ◽  
pp. 483-497
Author(s):  
Weiwei Chen ◽  
Timothy F. Page
Keyword(s):  
Health Care ◽  
Health Insurance ◽  
The United States ◽  
Health Plans ◽  
Medical Needs ◽  
Care Access ◽  
Health Care Experiences ◽  
Monitoring Survey ◽  
Using Data ◽  
The Impact

High-deductible health plans (HDHPs) have become increasingly prevalent among employer-sponsored health plans and plans offered through the Health Insurance Marketplace in the United States. This study examined the impact of deductible levels on health care experiences in terms of care access, affordability, routine checkup, out-of-pocket cost, and satisfaction using data from the Health Reform Monitoring Survey. The study also tested whether the experiences of Marketplace enrollees differed from off-Marketplace individuals, controlling for deductible levels. Results from multivariable and propensity score weighted regression models showed that many of the outcomes were adversely affected by deductible levels and Marketplace enrollment. These results highlight the importance of efforts to help individuals choose the plan that fits both their medical needs and their budgets. The study also calls for more attention to improving provider acceptance of HDHPs and Marketplace plans as these plans become increasingly common over time.

Contending with Risk Selection in Health Insurance Markets in Germany

2006 ◽  
Vol 7 (Supplement) ◽  
pp. 75-91 ◽  
Author(s):  
Jacob Glazer ◽  
Thomas G. McGuire
Keyword(s):  
Health Insurance ◽  
Risk Adjustment ◽  
Simple Approach ◽  
Insurance Markets ◽  
Risk Selection ◽  
Health Plans ◽  
Health Insurance Markets ◽  
The U.S

Abstract In many countries, competition among health plans or sickness funds raises issues of risk selection. Funds may discourage or encourage potential enrollees from joining, and these actions may have efficiency or fairness implications. This article reviews the experience in the U.S., and comments on the evidence for risk selection in Germany. There is little evidence that risk selection causes efficiency problems in Germany, but risk selection does lead to an inequality in contribution rates. A simple approach to equalizing contribution rates that does not involve risk adjustment is presented and discussed.

The funding status of retiree health plans in the public sector

2011 ◽  
Vol 10 (2) ◽  
pp. 291-314 ◽  
Author(s):  
ROBERT L. CLARK ◽  
MELINDA SANDLER MORRILL
Keyword(s):  
Labor Market ◽  
Health Insurance ◽  
Public Sector ◽  
Private Sector ◽  
Accounting Standards ◽  
Health Plans ◽  
The Public ◽  
Government Accounting ◽  
Retirement Benefit ◽  
Unfunded Liabilities

AbstractWhile no longer common in the private sector, most public sector employers offer retiree health insurance (RHI) as a retirement benefit to their employees. While these plans are thought to be an important tool for employers to attract, retain, motivate, and ultimately retire workers, they represent a large and growing cost. This paper reviews what is currently known about RHI in the public sector, while highlighting many important unanswered questions. The analysis is informed by data produced in accordance with the 2004 Government Accounting Standards Board Rule 45 (GASB 45). We consider the extent of the unfunded liabilities states face and explore what factors may explain the variation in liabilities across states. The importance and sustainability of RHI plans in the public sector ultimately depend on how workers view and value this post-retirement benefit, yet little is known about how RHI directly impacts the public sector labor market. We conclude with a discussion of the future of RHI plans in the public sector.

scholarly journals Financial Protection in Health Insurance Schemes: A Comparative Analysis of Mediclaim Policy and CHAT Scheme in India

2012 ◽  
Vol 14 (1) ◽  
pp. 13-25 ◽  
Author(s):  
Sukumar Vellakkal
Keyword(s):  
Health Insurance ◽  
Low Income ◽  
Private Health Insurance ◽  
Household Survey ◽  
Financial Protection ◽  
Health Plans ◽  
Total Health Expenditure ◽  
Hypothetical Situation ◽  
Resource Poor ◽  
Insurance Penetration

This article analyzes the level of financial protection to low-income people during illness in ‘private health insurance’ and ‘people’s preferred health insurance’. In a hypothetical situation of being insured with both the pro-poor version of the ‘Mediclaim policy’ (private health insurance) and CHAT—‘Choosing Health Plans All-Together’—scheme (people’s preferred health insurance), this study analyzed the out-of-pocket-spending for health care incurred by persons per reported illness episodes in four select resource-poor locations in India. Three data sources were used: (a) household survey, (b) CHAT: a field-based experiment conducted in India to reveal people’s preference for health insurance benefits and (c) the specification of conditions of Mediclaim policy. The study found, first, that the Mediclaim policy covers a small proportion (8 per cent) of the total reported illness episodes but CHAT scheme covers a large proportion (90 per cent) of illness episodes and, second, that the Mediclaim policy reimburses 5 per cent of the total health expenditure but CHAT scheme reimburses 37 per cent. The study concludes that private health insurance provides lower level of financial protection compared to ‘people’s preferred health insurance’ and hence recommends that health insurance packages must be comprehensive and reflect community preference to make it attractive so that health insurance penetration can be increased.

Health Risk, Income, and Employment-Based Health Insurance

2010 ◽  
Vol 13 (2) ◽  
Author(s):  
M. Kate Bundorf ◽  
Bradley Herring ◽  
Mark V. Pauly
Keyword(s):  
Health Insurance ◽  
Health Risk ◽  
Medical Expenditure Panel Survey ◽  
Medical Expenditure ◽  
Middle Income ◽  
Large Group ◽  
Low Incomes ◽  
Coverage Rates ◽  
The Relationship ◽  
Group Health Insurance

While many believe that an individual’s health plays an important role in both their willingness and ability to obtain health insurance in the employment-based setting, relatively little agreement exists on the extent to which health status affects coverage rates, particularly for those with lower incomes. In this paper, we examine the relationship between health risk and the purchase of group health insurance and whether that relationship differs by a person’s income and whether they obtain coverage in the small, medium, or large group market. Using the panel component of the 1996-2002 Medical Expenditure Panel Survey (MEPS), we find that health risk is positively associated with private health insurance across the different markets, and that this positive relationship is stronger for low and middle income people, particularly in the large group market. Our results are consistent with the existence of adverse selection in the group market in the form of low rates of coverage among low risks due to an absence of risk rating of premiums. We conclude that pooled premiums for low risks, particularly those with low incomes, may represent a more important financial barrier to coverage in voluntary group insurance than high premiums for high risks.

Insurance, Consumer Choice, and the Equilibrium Price and Quality of Hospital Care

2011 ◽  
Vol 11 (2) ◽  
Author(s):  
Michael L Katz
Keyword(s):  
Health Insurance ◽  
Managed Care ◽  
Consumer Choice ◽  
Hospital Care ◽  
Equilibrium Price ◽  
Health Plans ◽  
Quality Competition ◽  
Hospital System ◽  
Hospital Markets

Abstract I analyze price and quality competition in a model that captures important institutional features of U.S. hospital markets. I first consider duopoly hospitals serving a population of patients who are covered by insurance that their employers purchase from duopoly health plans. I show that second-best quality levels can be sustained as equilibrium outcomes under both indemnity insurance and managed care even when patients are fully insured. I also demonstrate that a monopoly hospital system can yield efficient quality levels and that prices may be lower under monopoly than duopoly even when there are no technical efficiencies associated with monopoly. The latter result arises when employers and health insurance plans view the hospitals as complements even though any given consumer views them as substitutes.

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