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Community rating and choice between traditional health insurance and managed care

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  • Mathias Kifmann

Abstract

This paper analyses the consequences of allowing a choice between traditional insurance and managed care under community rating. A model of a competitive health insurance market is developed; with the risk equalization scheme being imperfect. There are two types of individuals who are characterized by different costs with respect to traditional insurance. Compared with a situation where traditional insurance is compulsory, allowing choice can make both types better off, can increase the utility of low‐cost types at the expense of high‐cost types, as well as having no effect. Inefficiencies under compulsory traditional insurance can be eliminated and new inefficiencies can be created. Market equilibria are not necessarily second best. Copyright © 1999 John Wiley & Sons, Ltd.

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  • Mathias Kifmann, 1999. "Community rating and choice between traditional health insurance and managed care," Health Economics, John Wiley & Sons, Ltd., vol. 8(7), pages 563-578, November.
    • Handle: RePEc:wly:hlthec:v:8:y:1999:i:7:p:563-578
    DOI: 10.1002/(SICI)1099-1050(199911)8:7<563::AID-HEC477>3.0.CO;2-A
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    References listed on IDEAS

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    1. Riley, John G, 1979. "Informational Equilibrium," Econometrica, Econometric Society, vol. 47(2), pages 331-359, March.
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    Cited by:

    1. Kifmann, Mathias, 2002. "Community rating in health insurance and different benefit packages," Journal of Health Economics, Elsevier, vol. 21(5), pages 719-737, September.
    2. Stefan Greß & Ralf Kocher & Jürgen Wasem, 2004. "Wettbewerbsorientierte Reformen im Gesundheitssystem der Schweiz – Vorbild für regulierten Wettbewerb in der deutschen GKV?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 5(1), pages 59-70, February.
    3. Jan Brosse & Mathias Kifmann, 2013. "Competition in Health Insurance and Premium Regulation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(1), pages 21-26, 04.
    4. Jan Brosse & Mathias Kifmann, 2013. "Competition in Health Insurance and Premium Regulation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(01), pages 21-26, April.
    5. repec:ces:ifodic:v:11:y:2013:i:1:p:19083487 is not listed on IDEAS

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