ArticleQuantitative economics2017
Demand heterogeneity in insurance markets: Implications for equity and efficiency.
Article in Quantitative economics, 2017. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Cited by 7 papers.
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Who cites it
7 citing papers in PubMed.
- The Two-Margin Problem in Insurance Markets.The review of economics and statistics · 2023Article
- When Should There Be Vertical Choice in Health Insurance Markets?The American economic review · 2022Article
- Effects of SOFrontiers in public health · 2021Article
- Upcoding: Evidence from Medicare on Squishy Risk Adjustment.The journal of political economy · 2020Article
- Deriving risk adjustment payment weights to maximize efficiency of health insurance markets.Journal of health economics · 2018Article
- Measuring efficiency of health plan payment systems in managed competition health insurance markets.Journal of health economics · 2017Article
- Selection in Health Insurance Markets and Its Policy Remedies.The journal of economic perspectives : a journal of the American Economic AssociationArticle
Corrections and comments
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Authors and funding
1 author.
Funding
Abstract
In many markets insurers are barred from price discrimination based on consumer characteristics like age, gender, and medical history. In this paper, I build on a recent literature to show why such policies are inefficient if consumers differ in their willingness-to-pay for insurance conditional on the insured losses they generate. Using administrative claims data, I then show that this type of demand heterogeneity is empirically relevant in a consumer health plan setting. Younger and older consumers and men and women reveal strikingly different demand for health insurance, conditional on their objective medical spending risk. This implies that these groups must face different prices so as to sort themselves efficiently across insurance contracts. The theoretical and empirical analysis highlights a fundamental trade-off between equity and efficiency that is unique to selection markets.
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Registered trials
Read under generation 80e0d062 · epoch 390. Bibliography from PubMed, PubMed Central and OpenAlex; grants from NIH RePORTER; trial links from ClinicalTrials.gov; estimates, votes and beliefs from the OpenQuestion graph.