Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects.
Reclassification risk is a major concern in health insurance where contracts are typically 1 year in length but health shocks often persist for much longer. While most health systems with private insurers pair short-run contracts with substantial pricing regulations to reduce reclassification risk,...
| Publicado en: | Review of Economic Studies Vol. 91; no. 2; pp. 1085 - 1122 |
|---|---|
| Autores principales: | , , , |
| Formato: | Artículo |
| Publicado: |
Oxford University Press / USA
Mar2024
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=175875941&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 175875941 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: Mar2024 vid: 91 iid: 2 pid: 622 pub: Oxford University Press / USA artinfo: ui: 175875941 10.1093/restud/rdad054 ppf: 1085 ppct: 37 formats: tig: atl: Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects. aug: au: Ghili, Soheil Handel, Ben Hendel, Igal Whinston, Michael D affil: Yale School of Management Department of Economics, UC Berkeley Department of Economics, Northwestern University Department of Economics and Sloan School of Management, M.I.T su: Utah Health insurance Insurance policies National health insurance Insurance companies Health insurance exchanges Price regulation sug: subj: Health insurance Utah Direct Health and Medical Insurance Carriers Insurance Agencies and Brokerages Other Direct Insurance (except Life, Health, and Medical) Carriers Direct group life, health and medical insurance carriers Direct individual life, health and medical insurance carriers Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors Insurance policies National health insurance Insurance companies Health insurance exchanges Price regulation ab: Reclassification risk is a major concern in health insurance where contracts are typically 1 year in length but health shocks often persist for much longer. While most health systems with private insurers pair short-run contracts with substantial pricing regulations to reduce reclassification risk, long-term contracts with one-sided insurer commitment have significant potential to reduce reclassification risk without the negative side effects of price regulation, such as adverse selection. We theoretically characterize optimal long-term insurance contracts with one-sided commitment, extending the literature in directions necessary for studying health insurance markets. We leverage this characterization to provide a simple algorithm for computing optimal contracts from primitives. We estimate key market fundamentals using data on all under-65 privately insured consumers in Utah. We find that dynamic contracts are very effective at reducing reclassification risk for consumers who arrive at the market in good health, but they are ineffective for consumers who come to the market in bad health, demonstrating that there is a role for the government insurance of pre-market health risks. Individuals with steeply rising income profiles find front-loading costly, and thus relatively prefer ACA-type exchanges. Switching costs enhance, while myopia moderately compromises, the performance of dynamic contracts. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
|---|