Findings from University of Texas at Austin in the Area of Economic Policy Reported (Screening In Contract Design: Evidence From the Aca Health Insurance Exchanges)

2019 MAY 30 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators discuss new findings in Economics - Economic Policy. According to news reporting originating from Austin, United States, by NewsRx correspondents, research stated, “We study insurers’ use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consumer types.”

Funders for this research include Eunice Kennedy Shriver National Institute of Child Health and Human Development, Pfizer, National Institute of Mental Health, Laura and John Arnold Foundation.

Our news editors obtained a quote from the research from the University of Texas at Austin, “A minority of consumers, identifiable by demand for particular classes of prescription drugs, are predictably unprofitable. We then show that contract features relating to these drugs are distorted in a manner consistent with multidimensional screening.”

According to the news editors, the research concluded: “The empirical findings support a long theoretical literature examining how insurance contracts offered in equilibrium can fail to optimally trade off risk protection and moral hazard.”

For more information on this research see: Screening In Contract Design: Evidence From the Aca Health Insurance Exchanges. American Economic Journal Economic Policy, 2019;11(2):64-107. American Economic Journal Economic Policy can be contacted at: Amer Economic Assoc, 2014 Broadway, Ste 305, Nashville, TN 37203, USA.

The news editors report that additional information may be obtained by contacting M. Geruso, University of Texas - Austin, Dept. of Economics, 2225 Speedway, Austin, TX 78712, United States. Additional authors for this research include T. Layton and D. Prinz.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1257/pol.20170014. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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