IDEAS home Printed from https://ideas.repec.org/p/uca/ucapdv/103.html
   My bibliography  Save this paper

Adverse selection in the U.S. health insurance markets: Evidence from the MEPS

Author

Listed:
  • Di Novi, Cinzia

Abstract

We use the 2003/2004 Medical Expenditure Panel Survey in conjunctions with the 2002 National Health Interview Survey to test for adverse selection in the U.S. private health insurance market. The key idea is to test whether the individuals who are more exposed to health risks also buy insurance contracts with more coverage or higher expected payments. The critical statistical problem is that the extension of insurance is only measured for those who are insured and face positive health care expenditure. So there is a possible sample selection bias effect. The procedure used is based on a method suggested by Wooldridge (1995). The method also accounts for heterogeneity across individuals. The simultaneous account taken of both possible sources of bias is new for this kind of application.

Suggested Citation

  • Di Novi, Cinzia, 2008. "Adverse selection in the U.S. health insurance markets: Evidence from the MEPS," POLIS Working Papers 103, Institute of Public Policy and Public Choice - POLIS.
    • Handle: RePEc:uca:ucapdv:103
    as

    Download full text from publisher

    File URL: https://drive.google.com/file/d/1llQgHn0sodgcgvav6CJ3P7Q5LxFLVoZL/view?usp=sharing
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Keeler, Emmett B & Newhouse, Joseph P & Phelps, C E, 1977. "Deductibles and the Demand for Medical Care Services: The Theory of a Consumer Facing a Variable Price Schedule under Uncertainty," Econometrica, Econometric Society, vol. 45(3), pages 641-655, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marchese, Carla, 2008. "The limits to growth then and now," POLIS Working Papers 105, Institute of Public Policy and Public Choice - POLIS.
    2. Piero Cavaleri & Michael Keren & Giovanni B. Ramello & Vittorio Valli, 2009. "Publishing an E-Journal on a Shoe String: Is It a Sustainable Project?," Economic Analysis and Policy, Elsevier, vol. 39(1), pages 89-101, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ed Westerhout & Kees Folmer, 2007. "Co-payment systems in health care; between moral hazard and risk reduction," CPB Discussion Paper 78.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Charles E. Phelps, 1984. "Taxing Health Insurance: How Much Is Enough?," Contemporary Economic Policy, Western Economic Association International, vol. 3(2), pages 47-54, December.
    3. Stefan Boes & Michael Gerfin, 2016. "Does Full Insurance Increase the Demand for Health Care?," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1483-1496, November.
    4. Harri Sintonen & Timo Maljanen, 1995. "Explaining the utilisation of dental care. Experiences from the finnish dental market," Health Economics, John Wiley & Sons, Ltd., vol. 4(6), pages 453-466, November.
    5. Michael Smart & Mark Stabile, 2005. "Tax credits, insurance, and the use of medical care," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 345-365, May.
    6. Niels Skipper, 2013. "On The Demand For Prescription Drugs: Heterogeneity In Price Responses," Health Economics, John Wiley & Sons, Ltd., vol. 22(7), pages 857-869, July.
    7. Ethan M. J. Lieber, 2017. "Does It Pay to Know Prices in Health Care?," American Economic Journal: Economic Policy, American Economic Association, vol. 9(1), pages 154-179, February.
    8. Toshiaki Iizuka & Hitoshi Shigeoka, 2018. "Free for Children? Patient Cost-sharing and Healthcare Utilization," NBER Working Papers 25306, National Bureau of Economic Research, Inc.
    9. Norihiro Komura & Shun-ichiro Bessho, 2022. "The Longer-term Impact of Coinsurance for the Elderly - Evidence from High-access Case -," KIER Working Papers 1074, Kyoto University, Institute of Economic Research.
    10. Lucien Gardiol & Pierre-Yves Geoffard & Chantal Grandchamp, 2005. "Separating selection and incentive effects in health insurance," PSE Working Papers halshs-00590713, HAL.
    11. Buitrago, Giancarlo & Rodríguez-Lesmes, Paul Andrés & Serna, Natalia & Vera-Hernández, Marcos, 2023. "The Role of Hospital Networks in Individual Mortality," Documentos de Trabajo 20945, Universidad del Rosario.
    12. Aviva Aron-Dine & Liran Einav & Amy Finkelstein & Mark Cullen, 2012. "Moral hazard in health insurance: How important is forward looking behavior?," Discussion Papers 11-007, Stanford Institute for Economic Policy Research.
    13. Marianne Simonsen & Lars Skipper & Niels Skipper, 2017. "Piling Pills? Forward-Looking Behavior and Stockpiling of Prescription Drugs," Economics Working Papers 2017-08, Department of Economics and Business Economics, Aarhus University.
    14. Cameron Kaplan & Yuting Zhang, 2014. "The January Effect: Medication Reinitiation Among Medicare Part D Beneficiaries," Health Economics, John Wiley & Sons, Ltd., vol. 23(11), pages 1287-1300, November.
    15. Khwaja, Ahmed, 2010. "Estimating willingness to pay for medicare using a dynamic life-cycle model of demand for health insurance," Journal of Econometrics, Elsevier, vol. 156(1), pages 130-147, May.
    16. Marianne Simonsen & Lars Skipper & Niels Skipper, 2016. "Price Sensitivity of Demand for Prescription Drugs: Exploiting a Regression Kink Design," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(2), pages 320-337, March.
    17. Manning, Willard G. & Marquis, M. Susan, 1996. "Health insurance: The tradeoff between risk pooling and moral hazard," Journal of Health Economics, Elsevier, vol. 15(5), pages 609-639, October.
    18. Hao Yu, 2017. "China’s medical savings accounts: an analysis of the price elasticity of demand for health care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(6), pages 773-785, July.
    19. Ernst R. Berndt & Joseph P. Newhouse, 2010. "Pricing and Reimbursement in U.S. Pharmaceutical Markets," NBER Working Papers 16297, National Bureau of Economic Research, Inc.
    20. Lipszyc, Barbara & Marchand, Maurice, 1999. "Assurance-maladie : comment adapter les taux de remboursement aux dépenses individuelles de santé?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 75(1), pages 447-473, mars-juin.

    More about this item

    Keywords

    adverse selection; health insurance; risk profile;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uca:ucapdv:103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucia Padovani (email available below). General contact details of provider: https://www.digspes.uniupo.it .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.