Does Health Insurance Coverage Fall When Nonprofit Insurers Become For-Profits?
42 Pages Posted: 29 Jun 2018
Date Written: July 18, 2017
In exchange for tax exemptions, Blue Cross and Blue Shield (BCBS) health insurers were expected to provide health insurance to the "bad risks," those for whom coverage was unavailable from other insurers. I present evidence that five years after a BCBS plan converted to for-profit status, the probability of having insurance was about 1.4 percentage point higher, a 9 percent reduction in the uninsured. The increase in coverage does not mask reductions among populations often targeted by public policies. However, there is evidence of increased risk selection which suggests that the bad risks might have been worse off after a conversion.
Keywords: Nonprofit, Health Insurance, Conversion, Risk Selection
JEL Classification: L33, H25, I13, I18, L50
Suggested Citation: Suggested Citation