I wrote a short paper for my Health Econ class, and for kicks put it up on Google Docs. I'd love to get your feedback on The Expected Effects of the Public Option and Mandated Coverage on Health Insurance Premiums and Total Medical Expenditures.
Don't be intimidated by the title—it's almost as long as the paper itself. :-)
Update: FWIW I've also posted the paper in its entirety to my other blog here.
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1 hour ago
2 comments:
The notion of adverse selection with voluntary health insurance should be tested -- will "healthy" people forgo AFP insurance? I doubt it. The costs of getting "tagged" with medical expenses when you don't have insurance may be catastrophic. A risk adverse individual should still purchase insurance even though they deem themselves to be healthy.
Greg-
It gets tested every day.
By definition, risk-averse people are willing to pay actuarially fair premiums plus a risk factor, but the load charged for individual insurance (60-80% of benefits) exceed that factor for most people.
Perversely, one of the reasons insurance is so expensive for individuals is that no rational healthy person would pay such rates, so the insurer can infer that if you're interested in insurance you must be sick, so rates should be higher.
-c
PS Thanks for commenting!
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