Assessing incentives for service-level selection in private health insurance exchanges

doi:10.1016/j.jhealeco.2014.01.009

. 2014 May:35:47-63.

doi: 10.1016/j.jhealeco.2014.01.009. Epub 2014 Feb 17.

Assessing incentives for service-level selection in private health insurance exchanges

Thomas G McGuire¹, Joseph P Newhouse², Sharon-Lise Normand³, Julie Shi⁴, Samuel Zuvekas⁵

Affiliations

¹ Department of Health Care Policy, Harvard Medical School, United States; NBER, United States. Electronic address: mcguire@hcp.med.harvard.edu.
² Department of Health Care Policy, Harvard Medical School, United States; NBER, United States; Department of Health Policy and Management, Harvard School of Public Health, United States; The Harvard Kennedy School, United States.
³ Department of Health Care Policy, Harvard Medical School, United States; Department of Health Policy and Management, Harvard School of Public Health, United States.
⁴ Department of Health Care Policy, Harvard Medical School, United States.
⁵ Agency for Healthcare Research and Quality, United States.

PMID: 24603443
PMCID: PMC4040329
DOI: 10.1016/j.jhealeco.2014.01.009

Assessing incentives for service-level selection in private health insurance exchanges

Thomas G McGuire et al. J Health Econ. 2014 May.

. 2014 May:35:47-63.

doi: 10.1016/j.jhealeco.2014.01.009. Epub 2014 Feb 17.

Authors

Thomas G McGuire¹, Joseph P Newhouse², Sharon-Lise Normand³, Julie Shi⁴, Samuel Zuvekas⁵

Affiliations

¹ Department of Health Care Policy, Harvard Medical School, United States; NBER, United States. Electronic address: mcguire@hcp.med.harvard.edu.
² Department of Health Care Policy, Harvard Medical School, United States; NBER, United States; Department of Health Policy and Management, Harvard School of Public Health, United States; The Harvard Kennedy School, United States.
³ Department of Health Care Policy, Harvard Medical School, United States; Department of Health Policy and Management, Harvard School of Public Health, United States.
⁴ Department of Health Care Policy, Harvard Medical School, United States.
⁵ Agency for Healthcare Research and Quality, United States.

PMID: 24603443
PMCID: PMC4040329
DOI: 10.1016/j.jhealeco.2014.01.009

Abstract

Even with open enrollment and mandated purchase, incentives created by adverse selection may undermine the efficiency of service offerings by plans in the new health insurance Exchanges created by the Affordable Care Act. Using data on persons likely to participate in Exchanges drawn from five waves of the Medical Expenditure Panel Survey, we measure plan incentives in two ways. First, we construct predictive ratios, improving on current methods by taking into account the role of premiums in financing plans. Second, relying on an explicit model of plan profit maximization, we measure incentives based on the predictability and predictiveness of various medical diagnoses. Among the chronic diseases studied, plans have the greatest incentive to skimp on care for cancer, and mental health and substance abuse.

Keywords: Adverse selection; Exchanges; Health insurance.

PubMed Disclaimer

Figures

**Figure 1. Observed and Predicted Total Spending by Decile of Predicted Spending**

**Figure 2. Predictive Ratio for CCS Categories**

See this image and copyright information in PMC

Cited by

A framework for ex-ante evaluation of the potential effects of risk equalization and risk sharing in health insurance markets with regulated competition.
van Kleef RC, Reuser M, Stam PJA, van de Ven WPMM. van Kleef RC, et al. Health Econ Rev. 2024 Jul 24;14(1):57. doi: 10.1186/s13561-024-00540-4. Health Econ Rev. 2024. PMID: 39046547 Free PMC article. Review.
The goal of risk equalization in regulated competitive health insurance markets.
van de Ven W, Hamstra G, van Kleef R, Reuser M, Stam P. van de Ven W, et al. Eur J Health Econ. 2023 Feb;24(1):111-123. doi: 10.1007/s10198-022-01457-7. Epub 2022 Mar 29. Eur J Health Econ. 2023. PMID: 35348921 Free PMC article.
Access to mental health support services in Accountable Care Organizations: A national survey.
Busch SH, Tomaino M, Newton H, Meara E. Busch SH, et al. Healthc (Amst). 2022 Mar;10(1):100613. doi: 10.1016/j.hjdsi.2022.100613. Epub 2022 Jan 23. Healthc (Amst). 2022. PMID: 35081475 Free PMC article.
Improving the Performance of Risk Adjustment Systems: Constrained Regressions, Reinsurance, and Variable Selection.
McGuire TG, Zink AL, Rose S. McGuire TG, et al. Am J Health Econ. 2021 Fall;7(4):497-521. doi: 10.1086/716199. Epub 2021 Oct 4. Am J Health Econ. 2021. PMID: 34869790 Free PMC article.
Assessment of Perceptions of Mental Health vs Medical Health Plan Networks Among US Adults With Private Insurance.
Busch SH, Kyanko K. Busch SH, et al. JAMA Netw Open. 2021 Oct 1;4(10):e2130770. doi: 10.1001/jamanetworkopen.2021.30770. JAMA Netw Open. 2021. PMID: 34677592 Free PMC article.

See all "Cited by" articles

References

1. Agency for Healthcare Research and Quality . MEPS HC-092 1996-2004 Risk Adjustment Scores, Public Use File. Gaithersburg, MD: 2008.
1. Agency for Healthcare Research and Quality . MEPS HC-128: Medical Conditions File. Rockville, MD: 2011.
1. Barry CL, Weiner JP, Lemke K, Busch SH. Risk Adjustment in Health Insurance Exchanges for Individuals with Mental Illness. American Journal of Psychiatry. 2012;169:704–709. - PMC - PubMed
1. Barry CL, Ridgely MS. Mental health and substance abuse insurance parity for federal employees: how did health plans respond? Journal of Policy Analysis and Management. 2008;27(1):155–70. - PubMed
1. Blumberg L, Pollitz K. Health Insurance Exchanges: Organizing Health Insurance Marketplaces to Promote Health Reform Goals. The Urban Institute; Washington, DC: 2009.

MeSH terms

Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions
Actions

Grants and funding

LinkOut - more resources

Full Text Sources
Other Literature Sources
- scite Smart Citations

[1] Agency for Healthcare Research and Quality . MEPS HC-092 1996-2004 Risk Adjustment Scores, Public Use File. Gaithersburg, MD: 2008.

[2] Agency for Healthcare Research and Quality . MEPS HC-092 1996-2004 Risk Adjustment Scores, Public Use File. Gaithersburg, MD: 2008.

[3] Agency for Healthcare Research and Quality . MEPS HC-128: Medical Conditions File. Rockville, MD: 2011.

[4] Agency for Healthcare Research and Quality . MEPS HC-128: Medical Conditions File. Rockville, MD: 2011.

[5] Barry CL, Weiner JP, Lemke K, Busch SH. Risk Adjustment in Health Insurance Exchanges for Individuals with Mental Illness. American Journal of Psychiatry. 2012;169:704–709. - PMC - PubMed

[6] Barry CL, Weiner JP, Lemke K, Busch SH. Risk Adjustment in Health Insurance Exchanges for Individuals with Mental Illness. American Journal of Psychiatry. 2012;169:704–709. - PMC - PubMed

[7] Barry CL, Ridgely MS. Mental health and substance abuse insurance parity for federal employees: how did health plans respond? Journal of Policy Analysis and Management. 2008;27(1):155–70. - PubMed

[8] Barry CL, Ridgely MS. Mental health and substance abuse insurance parity for federal employees: how did health plans respond? Journal of Policy Analysis and Management. 2008;27(1):155–70. - PubMed

[9] Blumberg L, Pollitz K. Health Insurance Exchanges: Organizing Health Insurance Marketplaces to Promote Health Reform Goals. The Urban Institute; Washington, DC: 2009.

[10] Blumberg L, Pollitz K. Health Insurance Exchanges: Organizing Health Insurance Marketplaces to Promote Health Reform Goals. The Urban Institute; Washington, DC: 2009.

Save citation to file

Email citation

Add to Collections

Add to My Bibliography

Your saved search

Create a file for external citation management software

Your RSS Feed

Assessing incentives for service-level selection in private health insurance exchanges

Affiliations

Assessing incentives for service-level selection in private health insurance exchanges

Authors

Affiliations

Abstract

Figures

Similar articles

Cited by

References

MeSH terms

Grants and funding

LinkOut - more resources

Full Text Sources

Other Literature Sources