Regulatory Redistribution in the Market for Health Insurance

58 Pages Posted: 2 Apr 2012 Last revised: 31 Jan 2014

Jeffrey P. Clemens

University of California, San Diego (UCSD) - Department of Economics; NBER

Multiple version iconThere are 2 versions of this paper

Date Written: January 30, 2014

Abstract

In the early 1990s, several U.S. states enacted community rating regulations to equalize the health insurance premiums paid by the healthy and the sick. Consistent with severe adverse selection pressures, their private coverage rates fell by around 8 percentage points more than rates in comparable markets over subsequent years. By the early 2000s, following substantial public insurance expansions, coverage rates in several of these states had improved significantly. As theory predicts, recoveries were largest where public coverage expanded disproportionately for high cost populations. The analysis highlights that the incidence of public insurance and community rating regulations are tightly intertwined.

Keywords: Community Rating, Medicaid, Health Insurance, Social Insurance, Redistribution, Fiscal Competition

JEL Classification: H51, H11, H53, I11, I18, I38

Suggested Citation

Clemens, Jeffrey P., Regulatory Redistribution in the Market for Health Insurance (January 30, 2014). Available at SSRN: https://ssrn.com/abstract=2033424 or http://dx.doi.org/10.2139/ssrn.2033424

Jeffrey P. Clemens (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

HOME PAGE: http://econweb.ucsd.edu/~j1clemens/

NBER ( email )

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