Full Citation

Title: Regulatory Redistribution in the Market for Health Insurance

Citation Type: Working Paper

Publication Year: 2014

ISBN:

ISSN:

DOI: 10.3386/w19904

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Abstract: Community rating regulations equalize the insurance premiums faced by the healthy and the unhealthy. Intended reductions in the unhealthy's premiums can be undone, however, if the healthy forgo coverage. The severity of this adverse selection problem hinges largely on how health care costs are distributed across market participants. Theoretically, I show that Medicaid expansions can combat adverse selection by removing high cost individuals from the relevant risk pool. Empirically, I find that private coverage rates improved significantly in community rated markets when states expanded Medicaid's coverage of relatively unhealthy adults. The effects of Medicaid expansions and community rating regulations are fundamentally linked.

Url: http://www.nber.org/papers/w19904.pdf

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Authors: Clemens, Jeffrey

Series Title: NBER Working Paper Series

Publication Number: 19904

Institution: National Bureau of Economic Research

Pages:

Publisher Location: Cambridge, MA

Data Collections: IPUMS CPS

Topics: Other

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