Efficient Reinsurance in Health Insurance Markets

25 Pages Posted: 19 Sep 2017

See all articles by Anastasios Dosis

Anastasios Dosis

ESSEC Business School; University of Cergy-Pontoise - THEMA

Date Written: September 15, 2017


This paper studies a general, community-rated, private health insurance market. It proposes a government reinsurance scheme that discourages risk selection and promotes efficient competition. Under the proposed reinsurance scheme, the state provides insurance to insurers against losses caused by risk selection. The reinsurance scheme is entirely budget balanced, as it does not call for government subsidies, and requires the regulator to hold minimal information to implement it. Equilibrium is shown to exist and be efficient in any environment with a finite number of types, states and multidimensional heterogeneity even if single-crossing is not satisfied.

Keywords: health insurance, risk selection, reinsurance, efficiency

JEL Classification: D82, D86, I10, I13, I18

Suggested Citation

Dosis, Anastasios, Efficient Reinsurance in Health Insurance Markets (September 15, 2017). Available at SSRN: https://ssrn.com/abstract=3037653 or http://dx.doi.org/10.2139/ssrn.3037653

Anastasios Dosis (Contact Author)

ESSEC Business School

3 Avenue Bernard Hirsch
B.P 50105
Cergy - Pontoise Cedex, NA 95021

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011

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