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

• 成果类型: Article
• 署名作者: Geruso, Michael; Layton, Timothy; Prinz, Daniel
• 署名单位: University of Texas System; University of Texas Austin; National Bureau of Economic Research; Harvard University; Harvard Medical School; Harvard University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20170014
• 发表日期: 2019
• 页码: 64-107
• 关键词: plan payment systems; adverse selection; RISK; MARKETS; welfare

摘要

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.