Does Health Insurance Coverage Fall When Nonprofit Insurers Become For-Profits?

42 Pages Posted: 29 Jun 2018

Date Written: July 18, 2017

Abstract

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

Lieber, Ethan, Does Health Insurance Coverage Fall When Nonprofit Insurers Become For-Profits? (July 18, 2017). Journal of Health Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3011368

Ethan Lieber (Contact Author)

University of Notre Dame ( email )

3049 Jenkins Nanovic Halls
Notre Dame, IN 46556
United States

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