TY - JOUR
T1 - Market Segmentation and Competition in Health Insurance
AU - Dickstein, Michael J.
AU - Ho, Kate
AU - Mark, Nathaniel
N1 - Publisher Copyright:
© 2023 The University of Chicago. All rights reserved. Published by The University of Chicago Press.
PY - 2024/1
Y1 - 2024/1
N2 - In the United States, households obtain health insurance through distinct market segments. To explore the economics of this segmentation, we consider the effects of pooling coverage provided through small employers and through individual marketplaces. We model households’ demand for insurance and health care along with insurers’ price setting to predict equilibrium choices and premiums. Applying our model to data from Oregon, we find that pooling can mitigate adverse selection in the individual market and benefit small group households without raising taxpayer costs. Our estimates provide insight into the effects of new regulations that allow employers to shift coverage to individual marketplaces.
AB - In the United States, households obtain health insurance through distinct market segments. To explore the economics of this segmentation, we consider the effects of pooling coverage provided through small employers and through individual marketplaces. We model households’ demand for insurance and health care along with insurers’ price setting to predict equilibrium choices and premiums. Applying our model to data from Oregon, we find that pooling can mitigate adverse selection in the individual market and benefit small group households without raising taxpayer costs. Our estimates provide insight into the effects of new regulations that allow employers to shift coverage to individual marketplaces.
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U2 - 10.1086/725707
DO - 10.1086/725707
M3 - Article
AN - SCOPUS:85173741667
SN - 0022-3808
VL - 132
SP - 96
EP - 148
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 1
ER -