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Consumer Response to a National Marketplace for Individual Health Insurance
Author(s) -
Parente Stephen T.,
Feldman Roger,
Abraham Jean,
Xu Yi
Publication year - 2011
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/j.1539-6975.2010.01393.x
Subject(s) - competition (biology) , actuarial science , medical expenditure panel survey , business , health insurance , set (abstract data type) , state (computer science) , panel data , public economics , health care , economics , econometrics , economic growth , computer science , ecology , algorithm , biology , programming language
The objective of this analysis is to simulate the difference between national and state‐specific individual insurance markets on take‐up of individual health insurance. This simulation analysis was completed in three steps. First, we reviewed the literature to characterize the state‐specific individual insurance markets with respect to state regulations and to identify the effect of those regulations on health insurance premiums. Second, we used empirical data to develop premium estimates for the simulation that reflect case‐mix as well as state‐specific differences in health care markets. Third, we used a revised version of the 2005 Medical Expenditure Panel Survey (MEPS) to complete a set of simulations to identify the impact of three different scenarios for national market development. (National market estimates are based on the simulation model with competition among all 50 states and moderate impact assumptions.) We find evidence of a significant opportunity to reduce the number of uninsured under a proposal to allow the purchase of health insurance across state lines. The best scenario to reduce the uninsured, numerically, is competition among all 50 states with one clear winner. The most pragmatic scenario, with a good impact, is one winner in each regional market.