Advertising and Risk Selection in Health Insurance Markets

• 成果类型: Article
• 署名作者: Aizawa, Naoki; Kim, You Suk
• 署名单位: University of Wisconsin System; University of Wisconsin Madison; University of Minnesota System; University of Minnesota Twin Cities; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20151485
• 发表日期: 2018
• 页码: 828-867
• 关键词: Asymmetric information; adverse selection; MACRO DATA; medicare; adjustment; incentives; ECONOMICS; QUALITY; CHOICE; IMPACT

摘要

This paper studies the impact of advertising as a channel for risk selection in Medicare Advantage. We provide evidence that insurer advertising is responsive to the gains from risk selection. Then we develop and estimate an equilibrium model of Medicare Advantage with advertising, allowing rich individual heterogeneity. Our estimates show that advertising is effective in attracting healthy individuals who are newly eligible for Medicare, contributing to advantageous selection into Medicare Advantage. Moreover, risk selection through advertising substantially lowers premiums by improving insurers' risk pools. The distributional implication is that unhealthy consumers may be better off through cross-subsidization from healthy individuals.