The interaction of direct and indirect risk selection

Arbeitspapier

This paper analyzes the interaction of direct and indirect risk selection in health insurance markets. It is shown that direct risk selection - using measures unrelated to the benefit package like selective advertising or 'losing' applications of high risk individuals - nevertheless has an influence on the distortions of the benefit package caused by indirect risk selection. Direct risk selection (DRS) may either increase or decrease these distortions, depending on the type of equilibrium (pooling or separating), the type of DRS (positive or negative) and the type of cost for DRS (individual-specific or not). Regulators who succeed in reducing DRS by, e.g., banning excessive advertising or implementing fines for 'losing' applications, may therefore (unintentionally) mitigate or exacerbate the distortions of the benefit package caused by indirect risk selection. It is shown that the interaction of direct and indirect risk selection also alters the formula for optimal risk adjustment.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Research Papers in Economics ; No. 12/14

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Health Insurance, Public and Private ; Health: Government Policy; Regulation; Public Health ; Oligopoly and Other Imperfect Markets
• Thema: risk selection ; risk adjustment ; discrete choice

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Lorenz, Normann
• Ereignis: Veröffentlichung
• (wer): Universität Trier, Fachbereich IV – Volkswirtschaftslehre
• (wo): Trier
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/104564
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ