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Selection Incentives for Health Insurers in the Presence of Sophisticated Risk Adjustment
This article analyzes selection incentives for insurers in the Dutch basic health insurance market, which operates with community-rated premiums and sophisticated risk adjustment. Selection incentives result from the interplay of three market characteristics: possible actions by insurers, consumer r...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
SAGE Publications
2019
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7536529/ https://www.ncbi.nlm.nih.gov/pubmed/30704337 http://dx.doi.org/10.1177/1077558719825982 |
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author | van Kleef, Richard C. Eijkenaar, Frank van Vliet, René C. J. A. |
author_facet | van Kleef, Richard C. Eijkenaar, Frank van Vliet, René C. J. A. |
author_sort | van Kleef, Richard C. |
collection | PubMed |
description | This article analyzes selection incentives for insurers in the Dutch basic health insurance market, which operates with community-rated premiums and sophisticated risk adjustment. Selection incentives result from the interplay of three market characteristics: possible actions by insurers, consumer response to these actions, and predictable variation in profitability of insurance contracts. After a qualitative analysis of the first two characteristics our primary objective is to identify the third. Using a combination of claims data (N = 16.8 million) and survey information (N = 387,195), we find substantial predictable variation in profitability. On average, people in good health are profitable, while those in poor health are unprofitable. We conclude that Dutch insurers indeed face selection incentives. A complete measure of selection incentives, however, captures the correlation between individual-level profitability and consumer response to insurer-actions. Obtaining insight in this correlation is an important direction for further research. |
format | Online Article Text |
id | pubmed-7536529 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2019 |
publisher | SAGE Publications |
record_format | MEDLINE/PubMed |
spelling | pubmed-75365292020-10-14 Selection Incentives for Health Insurers in the Presence of Sophisticated Risk Adjustment van Kleef, Richard C. Eijkenaar, Frank van Vliet, René C. J. A. Med Care Res Rev Empirical Research This article analyzes selection incentives for insurers in the Dutch basic health insurance market, which operates with community-rated premiums and sophisticated risk adjustment. Selection incentives result from the interplay of three market characteristics: possible actions by insurers, consumer response to these actions, and predictable variation in profitability of insurance contracts. After a qualitative analysis of the first two characteristics our primary objective is to identify the third. Using a combination of claims data (N = 16.8 million) and survey information (N = 387,195), we find substantial predictable variation in profitability. On average, people in good health are profitable, while those in poor health are unprofitable. We conclude that Dutch insurers indeed face selection incentives. A complete measure of selection incentives, however, captures the correlation between individual-level profitability and consumer response to insurer-actions. Obtaining insight in this correlation is an important direction for further research. SAGE Publications 2019-02-01 2020-12 /pmc/articles/PMC7536529/ /pubmed/30704337 http://dx.doi.org/10.1177/1077558719825982 Text en © The Author(s) 2019 http://www.creativecommons.org/licenses/by-nc/4.0/ This article is distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access pages (https://us.sagepub.com/en-us/nam/open-access-at-sage). |
spellingShingle | Empirical Research van Kleef, Richard C. Eijkenaar, Frank van Vliet, René C. J. A. Selection Incentives for Health Insurers in the Presence of Sophisticated Risk Adjustment |
title | Selection Incentives for Health Insurers in the Presence of
Sophisticated Risk Adjustment |
title_full | Selection Incentives for Health Insurers in the Presence of
Sophisticated Risk Adjustment |
title_fullStr | Selection Incentives for Health Insurers in the Presence of
Sophisticated Risk Adjustment |
title_full_unstemmed | Selection Incentives for Health Insurers in the Presence of
Sophisticated Risk Adjustment |
title_short | Selection Incentives for Health Insurers in the Presence of
Sophisticated Risk Adjustment |
title_sort | selection incentives for health insurers in the presence of
sophisticated risk adjustment |
topic | Empirical Research |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7536529/ https://www.ncbi.nlm.nih.gov/pubmed/30704337 http://dx.doi.org/10.1177/1077558719825982 |
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