Managing adverse selection: underinsurance versus underenrollment

• 成果类型: Article
• 署名作者: Saltzman, Evan
• 署名单位: Emory University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12372
• 发表日期: 2021
• 页码: 359-381
• 关键词: health-insurance; COMPETITION; MARKETS; mandate; welfare; plan

摘要

Adverse selection in insurance markets may lead some consumers to underinsure or too few consumers to purchase insurance relative to the socially optimal level. I study whether common government policy interventions can mitigate both underinsurance and underenrollment due to adverse selection. I establish conditions under which there exists a tradeoff in addressing underinsurance and underenrollment. I then estimate a model of the California ACA insurance exchange using consumer-level data to quantify the welfare impact of risk adjustment and the individual mandate. I find (1) risk adjustment reduces underinsurance, but reduces enrollment and (2) the mandate increases enrollment, but increases underinsurance.