Prohibitions on Health Insurance Underwriting: A Means of Making Health Insurance Available or a Cause of Market Failure?

Browne, Mark J.; Frees, Edward W.

doi:10.2139/ssrn.170535

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Prohibitions on Health Insurance Underwriting: A Means of Making Health Insurance Available or a Cause of Market Failure?

35 Pages Posted: 31 Aug 1999

See all articles by Mark J. Browne

Mark J. Browne

St. John's University - Peter J. Tobin College of Business

Edward W. Frees

University of Wisconsin - Madison; Australian National University (ANU)

Date Written: June 18, 1999

Abstract

Health insurance underwriting restrictions that prohibit insurers from using disability status, gender, and age to classify risks will in theory result in greater insurance consumption by those positively impacted by the prohibition: disabled individuals, females, and older adults. Conversely, the prohibitions are expected to result in less health insurance consumption by those negatively impacted: able bodied individuals, males, and younger adults. Multinomial logit analysis and data from the Current Population Survey are used to test these hypotheses in both the small group and individual markets for health insurance. We find evidence consistent with theory.

JEL Classification: D1, D8, I1, J3

Suggested Citation: Suggested Citation

Browne, Mark J. and Frees, Edward (Jed) W., Prohibitions on Health Insurance Underwriting: A Means of Making Health Insurance Available or a Cause of Market Failure? (June 18, 1999). Available at SSRN: https://ssrn.com/abstract=170535 or http://dx.doi.org/10.2139/ssrn.170535