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Paying a Premium on Your Premium? Consolidation in the U.S. Health Insurance Industry / Leemore Dafny, Mark Duggan, Subramaniam Ramanarayanan.
- Format:
- Book
- Author/Creator:
- Dafny, Leemore.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w15434.
- NBER working paper series no. w15434
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2009.
- Summary:
- We examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. We make use of a proprietary, panel dataset of employer-sponsored healthplans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. We exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums. We estimate real premiums increased by approximately 7 percentage points (in a typical market) due to the rise in concentration during our study period. We also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians, whose absolute employment and relative earnings decline in its wake.
- Notes:
- Print version record
- October 2009.
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