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Restrictive Rating and Adverse Selection in Health Insurance
Author(s) -
Born Patricia H.,
Sirmans E. Tice
Publication year - 2020
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/jori.12282
Subject(s) - adverse selection , health insurance , actuarial science , selection (genetic algorithm) , business , patient protection and affordable care act , medical underwriting , group insurance , health care , self insurance , economics , economic growth , computer science , artificial intelligence
Recent healthcare reform in the United States, including rating restrictions, imposed substantial changes to health insurer operations. We provide evidence of the presence of adverse selection following the enactment of the Patient Protection and Affordable Care Act of 2010. Using a unique dataset consisting of information on health insurance plans from multiple health insurers, across states for the years 2013–2017, we document a statistically significant correlation between coverage and risk, indicating the presence of adverse selection, that varies over time in both the individual and group markets for health insurance.