Plan Sorting Under Risk Adjustment and Premium Discrimination in Health Insurance Exchanges

2013 ◽  
Author(s):  
Julie Shi
Keyword(s):  
Health Insurance ◽  
Risk Adjustment ◽  
Insurance Exchanges

scholarly journals Risk Adjustment in Health Insurance Exchanges for Individuals With Mental Illness

2012 ◽  
Vol 169 (7) ◽  
pp. 704-709 ◽  
Author(s):  
Colleen L. Barry ◽  
Jonathan P. Weiner ◽  
Klaus Lemke ◽  
Susan H. Busch
Keyword(s):  
Mental Illness ◽  
Health Insurance ◽  
Risk Adjustment ◽  
Insurance Exchanges

scholarly journals Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges

2019 ◽  
Vol 11 (2) ◽  
pp. 64-107 ◽  
Author(s):  
Michael Geruso ◽  
Timothy Layton ◽  
Daniel Prinz
Keyword(s):  
Health Insurance ◽  
Prescription Drugs ◽  
Risk Adjustment ◽  
Contract Design ◽  
Trade Off ◽  
Insurance Contracts ◽  
Exchange Risk ◽  
Multidimensional Screening ◽  
Risk Protection ◽  
Insurance Exchanges

We study insurers’ use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types. A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening. The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard. (JEL D82, G22, H51, I13, I18)

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.

scholarly journals Adverse Selection in Health Insurance

1998 ◽  
Vol 1 (1) ◽  
Author(s):  
David M. Cutler ◽  
Richard J. Zeckhauser
Keyword(s):  
Health Insurance ◽  
Adverse Selection ◽  
Risk Adjustment ◽  
Risk Sharing ◽  
Harvard University ◽  
Individual Choice ◽  
Insurance Policies ◽  
Efficiency Losses ◽  
Group Insurance ◽  
State And Local

Individual choice among health insurance policies may result in risk-based sorting across plans. Such adverse selection induces three types of losses: efficiency losses from individuals' being allocated to the wrong plans; risk-sharing losses, because premium variability is increased; and losses from insurers' distorting their policies to improve their mix of insureds. We discuss the potential for these losses and present empirical evidence on adverse selection in two groups of employees: Harvard University and the Group Insurance Commission of Massachusetts (serving state and local employees). In both groups, adverse selection is a signiacant concern. Harvard’s decision to contribute an equal amount to all insurance plans led to the disappearance of the most generous policy within three years. The Group Insurance Commission has contained adverse selection by subsidizing premiums proportionally and managing the most generous policy very tightly. A combination of prospective or retrospective risk adjustment, coupled with reinsurance for high-cost cases, seems promising as a way to provide appropriate incentives for enrollees and to reduce losses from adverse selection.

Rollout of health insurance exchanges is behind schedule

BMJ ◽  
2013 ◽  
Vol 346 (jun20 5) ◽  
pp. f4021-f4021
Author(s):  
M. McCarthy
Keyword(s):  
Health Insurance ◽  
Insurance Exchanges
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