Health Uninsurance in rural America: A partial equilibrium analysis

Artikel

Background: The cost of rural health continues to be high in the United States despite an overall improvement in national health insurance enrolment. Stakeholder's perception of adverse selection remains a paramount culprit in the challenges of rural insurance markets. Risk attitude has been revealed as an alternative for measuring this phenomenon, given the 2014 prohibition law on pre-existing conditions and a subsequent repeal in 2018 accompanied by extensive debate among congress. We examine the existence of adverse selection in rural insurance markets by comparing the effects of pre-existing or chronic health conditions and risk attitudes in a Principal-Agent model. Results: Using multinomial logit and complementary log-log binomial link models in a Principal-Agent framework, our results indicate that there is adverse selection in rural health insurance markets if pre-existing conditions are considered, but risk attitudes yield contrary effects. Conclusions: The major policy implication from this study is that respondents who have pre-existing/chronic conditions tend to patronise health insurance with a higher probability than other counterparts and therefore insurers are likely to incur losses given the law on pre-existing conditions as private information. The 2018 law on the exclusion of individuals with pre-existing conditions may be beneficial to the insurance companies at the expense of the populace. Hence, we suggest that market incentive-based programs should be encouraged to minimize rural health uninsurance.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Health Economics Review ; ISSN: 2191-1991 ; Volume: 9 ; Year: 2019 ; Issue: 19 ; Pages: 1-15

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Analysis of Health Care Markets ; Health Insurance, Public and Private
• Subject: Pre-existing conditions ; Principal-agent model ; Rural health uninsurance ; Complementary log-log binomial ; Spence-Mirrlees condition

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nganje, William ; Addey, Kwame Asiam
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2019

Further information

• DOI: doi:10.1186/s13561-019-0234-x
• Handle: http://hdl.handle.net/10419/285132
• Last update: 10.03.2025, 11:44 AM CET