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The Role of Agents and Brokers in the Market for Health Insurance

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  • Pinar Karaca-Mandic
  • Roger Feldman
  • Peter Graven

Abstract

Health insurance markets in the United States are characterized by imperfect information, complex products, and substantial search frictions. Insurance agents and brokers play a significant role in helping employers navigate these problems. However, little is known about the relation between the structure of the agent/broker market and access and affordability of insurance. This paper aims to fill this gap by investigating the influence of agents/brokers on health insurance decisions of small firms, which are particularly vulnerable to problems of financing health insurance. Using a unique membership database from the National Association of Health Underwriters together with a nationally representative survey of employers, we find that small firms in more competitive agent/broker markets are more likely to offer health insurance and at lower premiums. Moreover, premiums are less dispersed in more competitive agent/broker markets.

Suggested Citation

  • Pinar Karaca-Mandic & Roger Feldman & Peter Graven, 2013. "The Role of Agents and Brokers in the Market for Health Insurance," NBER Working Papers 19342, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19342
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    References listed on IDEAS

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    4. Yavas, Abdullah, 1994. "Middlemen in Bilateral Search Markets," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 406-429, July.
    5. Terza, Joseph V. & Basu, Anirban & Rathouz, Paul J., 2008. "Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling," Journal of Health Economics, Elsevier, vol. 27(3), pages 531-543, May.
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    Cited by:

    1. Hunter, Benjamin M., 2018. "Brokerage in commercialised healthcare systems: A conceptual framework and empirical evidence from Uttar Pradesh," Social Science & Medicine, Elsevier, vol. 202(C), pages 128-135.
    2. Pinar Karaca-Mandic & Jean M. Abraham & Kosali Simon & Roger Feldman, 2013. "Going into the Affordable Care Act: Measuring the Size, Structure, and Performance of the Individual and Small Group Markets for Health Insurance," NBER Chapters, in: Measuring and Modeling Health Care Costs, pages 419-456, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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