RESEARCH OBJECTIVE: To evaluate the effect of the tax subsidy on participation in employment-based health insurance for high- and low-risk individuals. The total exclusion of employer-paid health insurance premiums from taxable income has frequently been seen as contributing to excess insurance and hence welfare loss. However, less attention has been paid to quantifying the extent to which the tax subsidy mitigates the deleterious effects of adverse selection on the health insurance market. Adverse selection reduces pooling in an insurance market, so that high-risk individuals are either unable to obtain coverage or are forced to pay premiums that are unaffordable to all but the wealthiest. If there is an external benefit to society of an individual's purchase of medical care, then the presence of adverse selection may reduce the purchase of health care below the socially optimal level. Therefore, a mechanism for enhancing access to insurance and ultimately to medical care for high-risk individuals may be socially desirable. STUDY DESIGN: Data from the March 1996-March 1998 Current Population Survey (CPS). For each observation in the sample, state and federal income tax liability is calculated using code based on the ACIR Significant Features of Fiscal Federalism. The probability of having employment-based coverage in either one's own name or as a dependent is evaluated as a function of demographic variables such as age, education, marital status and family size, family income, type of employment, employer size, occupation, location, marginal tax rate, risk group (determined by self-assessed health status), and an interaction between risk group and tax rate. CPS data do not identify individuals who have declined offered coverage. Under alternative models of employer group decision making, the tax subsidy will have an important influence on the employer's decision to offer coverage. If offered, high-risk individuals accept coverage, while some low-risk individuals may decline coverage. PRINCIPAL FINDINGS: For all individuals, the probability of having coverage is an increasing function of the marginal tax rate. Those classified as high-risk because their own or a family member's self-assessed health status is fair or poor are less likely to have coverage than those considered low-risk. The effect of the tax subsidy on insurance coverage is greater for high-risk individuals than for individuals classified as low-risk. CONCLUSIONS: These preliminary results indicate that high-risk individuals benefit from the tax subsidy by increased access to employment-based coverage. Therefore, welfare loss from excess levels of health insurance may be mitigated by welfare gain through expanded access to health insurance and hence to health care for high-risk individuals. IMPLICATIONS FOR POLICY, DELIVERY, OR PRACTICE: Elimination or reduction of the tax exclusion of health insurance premiums may have the unintended consequences of disproportionately reducing the probability of obtaining coverage in the employment-based market for high-risk individuals.
To estimate the effect of changes in premiums for individual insurance on decisions to purchase individual insurance and how this price response varies among subgroups of the population.
Survey responses from the Current Population Survey (), the Survey of Income and Program Participation (), the National Health Interview Survey (), and data about premiums and plans offered in the individual insurance market in California, 1996–2001.
A logit model was used to estimate the decisions to purchase individual insurance by families without access to group insurance. This was modeled as a function of premiums, controlling for family characteristics and other characteristics of the market. A multinomial model was used to estimate the choice between group coverage, individual coverage, and remaining uninsured for workers offered group coverage as a function of premiums for individual insurance and out-of-pocket costs of group coverage.
The elasticity of demand for individual insurance by those without access to group insurance is about −.2 to −.4, as has been found in earlier studies. However, there are substantial differences in price responses among subgroups with low-income, young, and self-employed families showing the greatest response. Among workers offered group insurance, a decrease in individual premiums has very small effects on the choice to purchase individual coverage versus group coverage.
Subsidy programs may make insurance more affordable for some families, but even sizeable subsidies are unlikely to solve the problem of the uninsured. We do not find evidence that subsidies to individual insurance will produce an unraveling of the employer-based health insurance system.
Demand for health insurance; safety net; tax credits
Within the countries of the former Soviet Union, the Kyrgyz Republic has been a pioneer in reforming the system of health care finance. Since the introduction of its compulsory health insurance fund in 1997, the country has gradually moved from subsidizing the supply of services to subsidizing the purchase of services through the ‘single payer’ of the health insurance fund. In 2002 the government introduced a new co-payment for inpatients along with a basic benefit package. A key objective of the reforms has been to replace the burgeoning system of unofficial informal payments for health care with a transparent official co-payment, thereby reducing the financial burden of health care spending for the poor. This article investigates trends in out-of-pocket payments for health care using the results of a series of nationally representative household surveys conducted over the period 2001–2007, when the reforms were being rolled out. The analysis shows that there has been a significant improvement in financial access to health care amongst the population. The proportion paying state providers for consultations fell between 2004 and 2007. As a result of the introduction of co-payments for hospital care, fewer inpatients report making payments to medical personnel, but when they are made, payments are high, especially to surgeons and anaesthetists. However, although financial access for outpatient care has improved, the burden of health care payments amongst the poor remains significant.
Informal payments; health financing; reform; Kyrgyzstan
In Germany health policy-makers of all parties believe in competition as an incentive for creating innovation and to keep costs down. Sickness funds cover about 90% of the population=regulated market/10% are covered by health insurance plans=private market. The sickness funds in the regulated market have the same premium (this goes to a national agency and is distributed to the funds after a risk adjusted scheme that uses morbidity trees to develop a fair payment to the funds) but vary whether they have to ask for a separately paid surplus premium.
Sickness funds compete about surplus premiums, services and offers to the patients and about selection (healthy vs. sick). They have to ask:
What are the strongest interventions in increasing health status and keeping costs down?Who is offering a comprehensive and sustainable solution serving my population?With what kind of reimbursement scheme do I attract the right spirit … not too much interventions, but not too few as well …. tackling the right people … using the newest technology, but with as few costs as possible?
For more information on integrated care in Germany, please follow the link to the power point presentation below.
Germany; population based integrated care
The impact of isolated gatekeeping on health care costs remains unclear. The aim of this study was to assess to what extent lower costs in a gatekeeping plan compared with a fee for service plan were attributable to more efficient resource management, or explained by risk selection.
Year 2000 costs to the Swiss statutory sick funds and potentially relevant covariates were assessed retrospectively from beneficiaries participating in an observational study, their primary care physicians, and insurance companies. To adjust for case mix, two‐part regression models of health care costs were fitted, consisting of logistic models of any costs occurring, and of generalised linear models of the amount of costs in persons with non‐zero costs. Complementary data sources were used to identify selection effects.
A gatekeeping plan introduced in 1997 and a fee for service plan, in Aarau, Switzerland.
Of each plan, 905 randomly selected adult beneficiaries were invited. The overall participation rate was 39%, but was unevenly distributed between plans.
The characteristics of gatekeeping and fee for service beneficiaries were largely similar. Unadjusted total costs per person were Sw fr231 (8%) lower in the gatekeeping group. After multivariate adjustment, the estimated cost savings achieved by replacing fee for service based health insurance with gatekeeping in the source population amounted to Sw fr403–517 (15%–19%) per person. Some selection effects were detected but did not substantially influence this result. An impact of non‐detected selection effects cannot be ruled out.
This study hints at substantial cost savings through gatekeeping that are not attributable to mere risk selection.
economics; health care costs; managed care programmes; gatekeeping
New regulation of health insurance markets creates multiple levels of health plans, with designations like “Gold” and “Silver”. The underlying rationale for the heavy-metal approach to insurance regulation is that heterogeneity in demand for health care is not only due to health status (sick demand more than the healthy) but also to other, “taste” related factors (rich demand more than the poor). This paper models managed competition with demand heterogeneity to consider plan payment and enrollee premium policies in relation to efficiency (net consumer benefit) and fairness (the European concept of “solidarity”). Specifically, this paper studies how to implement a “Silver” and “Gold” health plan efficiently and fairly in a managed competition context. We show that there are sharp tradeoffs between efficiency and fairness. When health plans cannot or may not (because of regulation) base premiums on any factors affecting demand, enrollees do not choose the efficient plan. When taste (e.g. income) can be used as a basis of payment, a simple tax can achieve both efficiency and fairness. When only health status (and not taste) can be used as a basis of payment, health status-based taxes and subsidies are required and efficiency can only be achieved with a modified version of fairness we refer to as “weak solidarity.” An overriding conclusion is that the regulation of premiums for both the basic and the higher level plans is necessary for efficiency.
There is a broad literature on the consequences of applying different welfare standards in merger control. Total welfare is usually defined as the sum of consumer and provider surplus, i.e., potential external effects are not considered. The general result is then that consumer welfare is a more restrictive standard than total welfare, which is advantageous in certain situations. This relationship between the two standards is not necessarily true when the merger has significant external effects. We model mergers on hospital markets and allow for not-profit-maximizing behavior of providers and mandatory health insurance. Mandatory health insurance detaches the financial and consumption side of health care markets, and the concept consumer in merger control becomes non-evident. Patients not visiting the merging hospitals still are affected by price changes through their insurance premiums. External financial effects emerge on not directly affected consumers. We show that applying a restricted interpretation of consumer (neglecting externality) in health care merger control can reverse the relation between the two standards; consumer welfare standard can be weaker than total welfare. Consequently, applying the wrong standard can lead to both clearing socially undesirable and to blocking socially desirable mergers. The possible negative consequences of applying a simple consumer welfare standard in merger control can be even stronger when hospitals maximize quality and put less weight on financial considerations. We also investigate the implications of these results for the practice of merger control.
Merger control; Hospital merger; Welfare standard; Externality; I11; I18; L44
During the 1990s, the New Zealand health sector went through a decade of turbulence with a series of major structural changes being introduced in a relatively short period of time. The new millennium brought further change, with the establishment of 21 district health boards and the restoration of a less commercially-oriented system. The sector now appears to be more stable. However many incremental changes are in train and there has been considerable turbulence below the surface as key players jostle for position. This paper reports on some of the recent changes that have occurred in the restructuring of the New Zealand health system. Three issues are discussed: the devolution of funds and decision-making to district health boards, developments in primary health care, and the position of the private health insurance industry.
Markets for Medicare HMOs (health maintenance organizations) and supplemental Medicare coverage are often treated separately in existing literature. Yet because managed care plans and Medigap plans both cover services not covered by basic Medicare, these markets are clearly interrelated. We examine the extent to which Medigap premiums affect the likelihood of the elderly joining managed care plans.
The analysis is based on a sample of Medicare beneficiaries drawn from the 1996–1997 Community Tracking Study (CTS) Household Survey by the Center for Studying Health System Change. Respondents span 56 different CTS sites from 30 different states. Measures of premiums for privately-purchased Medigap policies were collected from a survey of large insurers serving this market. Data for individual, market, and HMO characteristics were collected from the CTS, InterStudy, and HCFA (Health Care Financing Administration).
Our analysis uses a reduced-form logit model to estimate the probability of Medicare HMO participation as a function of Medigap premiums controlling for other market- and individual-level characteristics. The logit coefficients were then used to simulate changes in Medicare participation in response to changes in Medigap premiums.
We found that Medigap premiums vary considerably among the geographic markets included in our sample. Measures of premiums from different insurers and for different types of Medigap policies were generally highly correlated across markets. Our models consistently indicate a strong positive relationship between Medigap premiums and HMO participation. This result is robust across several specifications. Simulations suggest that a one standard deviation increase in Medigap premiums would increase HMO participation by more than 8 percentage points.
This research provides strong evidence that Medigap premiums have a significant effect on seniors' participation in Medicare HMOs. Policy initiatives aimed at lowering Medigap premiums will likely discourage enrollment in Medicare HMOs, holding other factors constant. Although the Medigap premiums are just one factor affecting the future penetration rate of Medicare HMOs, they are an important driver of HMO enrollment and should be considered carefully when creating policy related to seniors' supplemental coverage. Similarly, our results imply that reforms to the Medicare HMO market would influence the demand for Medigap policies.
Medigap; Medicare managed care; premium effect on enrollment decisions; HMOs; Medicare
Aim To estimate the price sensitivity of consumer choice of health insurance firm. Method Using paneldata of the flows of insured between pairs of Dutch sickness funds during the period 1993–2002, we estimate the sensitivity of these flows to differences in insurance premium. Results The price elasticity of residual demand for health insurance was low during the period 1993–2002, confirming earlier findings based on annual changes in market share. We find small but significant elasticities for basic insurance but insignificant elasticities for supplementary insurance. Young enrollees are more price sensitive than older enrollees. Conclusion Competition was weak in the market for health insurance during the period under study. For the market-based reforms that are currently under way, this implies that measures to promote competition in the health insurance industry may be needed.
Health insurance; Consumer choice; Price elasticity; D12; I11; I18; L11
Cancer care in the United States often results in financial hardship for patients and their families. Standard health insurance covers most medical costs, but nonmedical costs (such as lost wages, deductibles, copayments, and travel to and from caregivers) are paid out of pocket. Over the course of treatment, these costs can become substantial. Insurance companies have addressed the burden of these out-of-pocket costs by offering supplemental cancer insurance policies that, upon diagnosis of cancer, pay cash benefits for items that usually require out-of-pocket expenditures and are distinct from reimbursements made by traditional health insurance. Limitations associated with managed care have fostered increased consumer awareness and interest in the United States for cancer insurance and its ability to defray treatment expenditures that usually require out-of-pocket payments. Marketing campaigns are becoming more aggressive, and the number of cancer insurance policies sold has been steadily rising. While cancer insurance is only recently gaining popularity in the United States, it has been a successful product in Japan for over twenty years. In Japan, approximately one-quarter of the population own cancer insurance, and ten-year retention rates are estimated at 75%. As a result, individuals are afforded good access to nonmedical cancer services. Understanding the factors that led to the success of cancer insurance in Japan may assist policymakers in evaluating cancer insurance policies as they become more prevalent in the United States.
Health reforms in Bulgaria have introduced major changes to the financing, delivery and regulation of health care. As in many other countries of Central and Eastern Europe, these included introducing general practice, establishing a health insurance system, reorganizing hospital services, and setting up new payment mechanisms for providers, including patient co-payments. Our study explored perceptions of regulatory barriers to equity in Bulgarian child health services.
50 qualitative in-depth interviews with users, providers and policy-makers concerned with child health services in Bulgaria, conducted in two villages, one town of 70,000 inhabitants, and the capital Sofia.
The participants in our study reported a variety of regulatory barriers which undermined the principles of equity and, as far as the health insurance system is concerned, solidarity. These included non-participation in the compulsory health insurance system, informal payments, and charging user fees to exempted patients. The participants also reported seemingly unnecessary treatments in the growing private sector. These regulatory failures were associated with the fast pace of reforms, lack of consultation, inadequate public financing of the health system, a perceived "commercialization" of medicine, and weak enforcement of legislation. A recurrent theme from the interviews was the need for better information about patient rights and services covered by the health insurance system.
Regulatory barriers to equity and compliance in daily practice deserve more attention from policy-makers when embarking on health reforms. New financing sources and an increasing role of the private sector need to be accompanied by an appropriate and enforceable regulatory framework to control the behavior of health care providers and ensure equity in access to health services.
In 2001, Thailand implemented the Universal Coverage Scheme (UCS), a public insurance system that aimed to achieve universal access to healthcare, including essential medicines, and to influence primary care centres and hospitals to use resources efficiently, via capitated payment for outpatient services and other payment policies for inpatient care. Our objective was to evaluate the impact of the UCS on utilisation of medicines in Thailand for three non-communicable diseases: cancer, cardiovascular disease and diabetes.
Interrupted time-series design, with a non-equivalent comparison group.
Quarterly purchases of medicines from hospital and retail pharmacies collected by IMS Health between 1998 and 2006.
UCS implementation, April–October 2001.
Total pharmaceutical sales volume and percent market share by licensing status and National Essential Medicine List status.
The UCS was associated with long-term increases in sales of medicines for conditions that are typically treated in outpatient primary care settings, such as diabetes, high cholesterol and high blood pressure, but not for medicines for diseases that are typically treated in secondary or tertiary care settings, such as heart failure, arrhythmias and cancer. Although the majority of increases in sales were for essential medicines, there were also postpolicy increases in sales of non-essential medicines. Immediately following the reform, there was a significant shift in hospital sector market share by licensing status for most classes of medicines. Government-produced products often replaced branded generic or generic competitors.
Our results suggest that expanding health insurance coverage with a medicine benefit to the entire Thai population increased access to medicines in primary care. However, our study also suggests that the UCS may have had potentially undesirable effects. Evaluations of the long-term impacts of universal health coverage on medicine utilisation are urgently needed.
Essential Medicines; Cardiology; Diabetes & Endocrinology; Oncology
To examine how much pooling of risks occurs among potential purchasers in the individual market, how much pooling occurs among those who purchase coverage, and whether there is greater pooling among longer-term enrollees.
The data are administrative records for enrollees in individual insurance plans in California in 2001, and from a survey of Californians enrolled in the individual insurance market and the uninsured.
Logit models were estimated for 5 health outcome measures to compare the insured and uninsured after adjusting for other factors that affect insurance status and health. Multivariate models were also estimated to explore the relationship between health and three measures of pooling in the market: plan type, pricing tier, and the actuarially adjusted premium paid by the enrollee.
Those who purchase individual health insurance are in better health than those who remain uninsured. On the other hand, a large share of people with health problems does obtain individual insurance. The distribution of subscribers across plan type and pricing tier varies with their health status. Those in poor health are less likely to purchase low benefit plans. There is less separation of risks for those who become sick after enrollment based on the measure of pricing tier. The distribution of subscribers across plan type for those who have health problems at enrollment and those who become sick differs, but so does the distribution of those who become sick and those who remain healthy.
Despite small differences among the healthy and sick, our results support the conclusion that there is considerable risk pooling in the individual market. To some extent, this pooling occurs because underwriting happens at the time people enroll and there is greater pooling among those who become sick than those who enroll sick. Our results however suggest that health savings accounts may further fragment the market.
Risk pooling; health insurance; adverse selection
OBJECTIVE. This article examines the factors related to an individual's decision to purchase a given amount of long-term care insurance coverage. DATA SOURCE AND STUDY SETTING. Primary data analyses were conducted on an estimation sample of 6,545 individuals who had purchased long-term care (LTC) insurance policies in late 1990 and early 1991, and 1,248 individuals who had been approached by agents but chose not to buy such insurance. Companies contributing the two samples represented 45 percent of total sales during the study year. STUDY DESIGN. A two-stage logit-OLS (ordinary least squares) choice-based sampling model was used to examine the relationship between the expected value of purchased coverage and explanatory variables that included: demographic traits, attitudes, risk premium, nursing home bed supply, and Medicaid program configurations. DATA COLLECTION. Mail surveys were used to collect information about individuals' reasons for purchase, attitudes about long-term care, and demographic characteristics. Through an identification code, information on the policy designs chosen by these individuals was linked to each of the returned mail surveys. The response rate to the survey was about 60 percent. PRINCIPAL FINDINGS. The model explains about 47 percent of the variance in the dependent variable-expected value of policy coverage. Important variables negatively associated with the dependent variable include advancing age, being married, and having less than a college education. Variables positively related include being male, having more income, and having increasing expected LTC costs. Medicaid program configuration also influences the level of benefits purchased: state reimbursement rates and the presence of comprehensive estate recovery programs are both positively related to the expected value of purchased benefits. Finally, as the difference between the premium charged and the actuarially fair premium increases, individuals buy less coverage. CONCLUSIONS. An important finding with implications for policymakers is that changes in Medicaid policy affect the decisions of consumers regarding the acquisition of private LTC policies as well as the level of protection chosen. This is particularly important to states interested in pursuing public-private partnerships in long-term care financing.
The potential of purchasers to influence the quality and safety of care has captured the attention of health sector leaders worldwide. Quality based purchasing explicitly seeks to hold providers accountable for the quality and safety of care. Three strategies are available to purchasers: (1) selective contracting based on quality; (2) payment differentials based on quality; and (3) sponsorship of comparative provider report cards. Examples are given to illustrate each of the three strategies. Governments, employers, social insurance funds, community based insurance organizations, health plans, donors, and other buyers of health services are encouraged to explore and debate these purchaser strategies within the context of an overarching national or local quality framework. Public and private funders of operations research are encouraged to support and disseminate evaluations of purchaser efforts to improve quality. This paper is designed to highlight and frame purchasers' strategies explicitly crafted to enhance the quality and safety of care. The ultimate aim is to encourage thoughtful discussion about whether or not one or more purchaser strategy might support a particular country's goals to improve care. Experiences from both developed and developing countries are included to facilitate the exchange of ideas and provide the broadest of perspectives.
purchaser strategies; quality based purchasing; performance based purchasing
WE ADDRESSED THE QUESTION OF WHETHER PRIVATE HEALTH CARE IS ILLEGAL in Canada by surveying the health insurance legislation of all 10 provinces. Our survey revealed multiple layers of regulation that seem to have as their primary objective preventing the public sector from subsidizing the private sector, as opposed to rendering privately funded practice illegal. Private insurance for medically necessary hospital and physician services is illegal in only 6 of the 10 provinces. Nonetheless, a significant private sector has not developed in any of the 4 provinces that do permit private insurance coverage. The absence of a significant private sector is probably best explained by the prohibitions on the subsidy of private practice by public plans, measures that prevent physicians from topping up their public sector incomes with private fees.
The Medicare program, the largest health insurance program in the United States, is clearly at a crossroads as it enters its third decade. Historical increases in health care expenditures, plus a changing political and economic landscape, have set the groundwork for policy reform. Two basic reform strategies--reimbursement arrangements and program funding mechanisms--are discussed. In 1983, Congress enacted the Prospective Payment System (PPS) which initiated a fundamental change in the way hospitals are paid for care delivered to Medicare beneficiaries. But the PPS is only a stepping-stone to broader reforms such as capitation and vouchers. In addition, new methods of program funding may be necessary, especially in light of policymakers' considerations of coverage of services such as long term care and organ transplants.
The health insurance system in Japan is based upon the Universal Medical Care Insurance System, which gives all citizens the right to join an insurance scheme of their own choice, as guaranteed by the provisions of Article 25 of the Constitution of Japan, which states: “All people shall have the right to maintain the minimum standards of wholesome and cultured living.” The health care system in Japan includes national medical insurance, nursing care for the elderly, and government payments for the treatment of intractable diseases. Medical insurance provisions are handled by Employee’s Health Insurance (Social Insurance), which mainly covers employees of private companies and their families, and by National Health Insurance, which provides for the needs of self-employed people. Both schemes have their own medical care service programs for retired persons and their families. The health care system for the elderly covers people 75 years of age and over and bedridden people 65 years of age and over. There is also a system under which the government pays all or part of medical expenses, and/or pays medical expenses not covered by insurance. This is referred to collectively as the “medical expenses payment system” and includes the provision of medical assistance for specified intractable diseases. Because severe acute pancreatitis has a high mortality rate, it is specified as an intractable disease. In order to lower the mortality rate of various diseases, including severe acute pancreatitis, the specification system has been adopted by the government. The cost of treatment for severe acute pancreatitis is paid in full by the government from the date the application is made for a certificate verifying that the patient has an intractable disease.
Medical care system; Acute pancreatitis; Japan’s health insurance system; Government payment system
Equitable financing is a key objective of health care systems. Its importance is evidenced in policy documents, policy statements, the work of health economists and policy analysts. The conventional categorisations of finance sources for health care are taxation, social health insurance, private health insurance and out-of-pocket payments. There are nonetheless increasing variations in the finance sources used to fund health care. An understanding of the equity implications would help policy makers in achieving equitable financing.
The primary purpose of this paper was to comprehensively assess the equity of health care financing in Malaysia, which represents a new country context for the quantitative techniques used. The paper evaluated each of the five financing sources (direct taxes, indirect taxes, contributions to Employee Provident Fund and Social Security Organization, private insurance and out-of-pocket payments) independently, and subsequently by combined the financing sources to evaluate the whole financing system.
Cross-sectional analyses were performed on the Household Expenditure Survey Malaysia 1998/99, using Stata statistical software package. In order to assess inequality, progressivity of each finance sources and the whole financing system was measured by Kakwani's progressivity index.
Results showed that Malaysia's predominantly tax-financed system was slightly progressive with a Kakwani's progressivity index of 0.186. The net progressive effect was produced by four progressive finance sources (in the decreasing order of direct taxes, private insurance premiums, out-of-pocket payments, contributions to EPF and SOCSO) and a regressive finance source (indirect taxes).
Malaysia's two tier health system, of a heavily subsidised public sector and a user charged private sector, has produced a progressive health financing system. The case of Malaysia exemplifies that policy makers can gain an in depth understanding of the equity impact, in order to help shape health financing strategies for the nation.
Existence or non-existence of adverse selection in insurance market is one of the important cases that have always been considered by insurers. Adverse selection is one of the consequences of asymmetric information. Theory of adverse selection states that high-risk individuals demand the insurance service more than low risk individuals do.
The presence of adverse selection in Iran’s supplementary health insurance market is tested in this paper. The study group consists of 420 practitioner individuals aged 20 to 59. We estimate two logistic regression models in order to determine the effect of individual’s characteristics on decision to purchase health insurance coverage and loss occurrence. Using the correlation between claim occurrence and decision to purchase health insurance, the adverse selection problem in Iranian supplementary health insurance market is examined.
Individuals with higher level of education and income level purchase less supplementary health insurance and make fewer claims than others make and there is positive correlation between claim occurrence and decision to purchase supplementary health insurance.
Our findings prove the evidence of the presence of adverse selection in Iranian supplementary health insurance market.
Asymmetric information; Supplementary health insurance; adverse selection; Logistic regression model
We demonstrate the existence of multiple dimensions of private information in the long-term care insurance market. Two types of people purchase insurance: individuals with private information that they are high risk and individuals with private information that they have strong taste for insurance. Ex post, the former are higher risk than insurance companies expect, while the latter are lower risk. In aggregate, those with more insurance are not higher risk. Our results demonstrate that insurance markets may suffer from asymmetric information even absent a positive correlation between insurance coverage and risk occurrence. The results also suggest a general test for asymmetric information.
The Patient Protection and Affordable Care Act of 2010 requires states to establish healthcare insurance exchanges by 2014 to facilitate the purchase of qualified health plans. States are required to establish exchanges for small businesses and individuals. A federally operated exchange will be established, and states failing to participate in any other exchanges will be mandated to join the federal exchange. Policymakers and health economists believe that exchanges will improve healthcare at lower cost by promoting competition among insurers and by reducing burdensome transaction costs. Consumers will no longer be isolated from monthly insurance premium costs. Exchanges will increase the number of patients insured with more cost-conscious managed care and high-deductible plans. These insurance plan models have historically undervalued emergency medical services, while also underinsuring patients and limiting their healthcare system access to the emergency department. This paradoxically increases demand for emergency services while decreasing supply. The continual devaluation of emergency medical services by insurance payers will result in inadequate distribution of resources to emergency care, resulting in further emergency department closures, increases in emergency department crowding, and the demise of acute care services provided to families and communities.
Like many other countries, the Netherlands has a health insurance system that combines mandatory basic insurance with voluntary supplementary insurance. Both types of insurance are founded on different principles. Since basic and supplementary insurance are sold by the same health insurers, both markets may interact. This paper examines to what extent basic and supplementary insurance are linked to each other and whether these links generate spillover effects of supplementary on basic insurance. Our analysis is based on an investigation into supplementary health insurance contracts, underwriting procedures and annual surveys among 1,700–2,100 respondents over the period 2006–2009. We find that health insurers increasingly use a variety of strategies to enforce a joint purchase of basic and supplementary health insurance. Despite incentives for health insurers to use supplementary insurance as a tool for risk selection in basic insurance, we find limited evidence of supplementary insurance being used this way. Only a minority of health insurers uses health questionnaires when people apply for supplementary coverage. Nevertheless, we find that an increasing proportion of high-risk individuals believe that insurers would not be willing to offer them another supplementary insurance contract. We discuss several strategies to prevent or to counteract the observed negative spillover effects of supplementary insurance.
Supplementary insurance; Risk selection; Switching behavior; Guaranteed renewability; D12; G22; I11; I18
Private practice physicians in Hawai‘i were surveyed to better understand their impressions of different insurance plans and their willingness to care for patients with those plans. Physician experiences and perspectives were investigated in regard to reimbursement, formulary limitations, pre-authorizations, specialty referrals, responsiveness to problems, and patient knowledge of their plans. The willingness of physicians to accept new patients from specific insurance company programs clearly correlated with the difficulties and limitations physicians perceive in working with the companies (p < 0.0012). Survey results indicate that providers in private practice were much more likely to accept University Health Alliance (UHA) and Hawai‘i Medical Services Association (HMSA) Commercial insurance than Aloha Care Advantage and Aloha Quest. This was likely related to the more favorable impressions of the services, payments, and lower administrative burden offered by those companies compared with others.