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Does Limiting Allowable Rating Variation In The Small Group Health Insurance Market Affect Employer Self‐Insurance?

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  • Erin Trish
  • Bradley Herring

Abstract

The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self‐insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self‐insurance across industries with varied health risk, using cross‐state variation in pre‐ACA rating regulations, the nationally representative 2008–2013 KFF/HRET Employer Health Benefits Survey, and a triple‐difference regression approach. We find that lower risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self‐insurance that is about 18 percentage points higher than otherwise‐similar higher risk employers, suggesting that these selection concerns are warranted.

Suggested Citation

  • Erin Trish & Bradley Herring, 2018. "Does Limiting Allowable Rating Variation In The Small Group Health Insurance Market Affect Employer Self‐Insurance?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 85(3), pages 607-633, September.
    • Handle: RePEc:bla:jrinsu:v:85:y:2018:i:3:p:607-633
    DOI: 10.1111/jori.12184
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    Cited by:

    1. Jing Jian Xiao & Chunsheng Tao, 2020. "Consumer finance/household finance: the definition and scope," China Finance Review International, Emerald Group Publishing Limited, vol. 11(1), pages 1-25, June.

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