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Pricing and Welfare in Health Plan Choice / M. Kate Bundorf, Jonathan D. Levin, Neale Mahoney.
- Format:
- Book
- Author/Creator:
- Bundorf, M. Kate.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w14153.
- NBER working paper series no. w14153
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2008.
- Summary:
- Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers. In the markets we observe, the welfare loss compared to the feasible efficient benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, we find substantial benefits from plan choice relative to single-insurer options.
- Notes:
- Print version record
- June 2008.
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