Researchers from Harvard School of Medicine Describe Findings in Health Insurance (Imperfect risk adjustment, risk preferences, and sorting in…

Insurance Weekly News

Researchers from Harvard School of Medicine Describe Findings in Health Insurance (Imperfect risk adjustment, risk preferences, and sorting in competitive health insurance markets)

By a News Reporter-Staff News Editor at Insurance Weekly News -- Data detailed on Health Insurance have been presented. According to news reporting originating in Boston, Massachusetts, by VerticalNews editors, the research stated, "I develop a model of insurer price-setting and consumer welfare under risk-adjustment, a policy commonly used to combat inefficient sorting due to adverse selection in health insurance markets."

Financial supporters for this research include Institute for Economic Development, National Institute of Mental Health.

The news reporters obtained a quote from the research from the Harvard School of Medicine, "I use the model to illustrate graphically that risk-adjustment causes health plan prices to be based on costs not predicted by the risk-adjustment model ('residual costs') rather than total costs, either weakening or exacerbating selection problems depending on the correlation between demand and costs predicted by the risk-adjustment model."

According to the news reporters, the research concluded: "I then use a structural model to estimate the welfare consequences of risk-adjustment, finding a welfare gain of over $600 per person-year."

For more information on this research see: Imperfect risk adjustment, risk preferences, and sorting in competitive health insurance markets. Journal of Health Economics, 2017;56():259-280. Journal of Health Economics can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Health Economics - www.journals.elsevier.com/journal-of-health-economics/)

Our news correspondents report that additional information may be obtained by contacting T.J. Layton, Harvard Med Sch, Boston, MA 02115, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jhealeco.2017.04.004. 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.

Keywords for this news article include: Boston, Massachusetts, United States, North and Central America, Health and Medicine, Health Insurance, Harvard School of Medicine.