Evidence of Adverse Selection in the Group Insurance Market

2014 ◽  
Author(s):  
Martin Eling ◽  
Ruo Jia ◽  
Yi Yao
Keyword(s):  
Adverse Selection ◽  
Insurance Market ◽  
Group Insurance

Regulatory Adverse Selection in the Life Insurance Market

2004 ◽  
Author(s):  
Mattias K. Polborn ◽  
Michael Hoy ◽  
Asha Sadanand
Keyword(s):  
Adverse Selection ◽  
Life Insurance ◽  
Insurance Market

Adverse selection in a start-up long-term care insurance market ‐ Abstract of the London Discussion

2015 ◽  
Vol 20 (2) ◽  
pp. 348-365
Keyword(s):  
Adverse Selection ◽  
Long Term Care ◽  
Insurance Market ◽  
Publication Type ◽  
Term Care ◽  
Start Up ◽  
Long Term Care Insurance

This abstract relates to the following paper: AdamsC.Adverse selection in a start-up long-term care insurance market. British Actuarial Journal. doi:10.1017/S1357321714000270

scholarly journals Collusion in a One-Period Insurance Market with Adverse Selection

2012 ◽  
Vol 12 (1) ◽  
Author(s):  
Manuel Willington ◽  
Alexander Alegría
Keyword(s):  
Adverse Selection ◽  
Health Systems ◽  
Insurance Market ◽  
Free Entry ◽  
Common Features ◽  
Full Insurance

Abstract We show that collusive-seeming outcomes may occur in equilibrium in a one-period competitive insurance market characterized by adverse selection. We build on the Inderst and Wambach (2001) model and assume that insurance is compulsory and involves a minimum premium and minimum coverage; these are common features in many health systems. In this setup we show that there is a range of equilibria, from the zero profit one where low-risks implicitly subsidize high risks, to one where firms obtain profits with both types of consumers. Moreover, we show that rents only partially dissipate if we assume free entry. Along these equilibria, high risks always obtain full insurance, while the low risks' coverage decreases as the firms' profits increase.

scholarly journals Adverse Selection in Health Insurance

1998 ◽  
Vol 1 (1) ◽  
Author(s):  
David M. Cutler ◽  
Richard J. Zeckhauser
Keyword(s):  
Health Insurance ◽  
Adverse Selection ◽  
Risk Adjustment ◽  
Risk Sharing ◽  
Harvard University ◽  
Individual Choice ◽  
Insurance Policies ◽  
Efficiency Losses ◽  
Group Insurance ◽  
State And Local

Individual choice among health insurance policies may result in risk-based sorting across plans. Such adverse selection induces three types of losses: efficiency losses from individuals' being allocated to the wrong plans; risk-sharing losses, because premium variability is increased; and losses from insurers' distorting their policies to improve their mix of insureds. We discuss the potential for these losses and present empirical evidence on adverse selection in two groups of employees: Harvard University and the Group Insurance Commission of Massachusetts (serving state and local employees). In both groups, adverse selection is a signiacant concern. Harvard’s decision to contribute an equal amount to all insurance plans led to the disappearance of the most generous policy within three years. The Group Insurance Commission has contained adverse selection by subsidizing premiums proportionally and managing the most generous policy very tightly. A combination of prospective or retrospective risk adjustment, coupled with reinsurance for high-cost cases, seems promising as a way to provide appropriate incentives for enrollees and to reduce losses from adverse selection.

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