Scope and Incentives for Risk Selection in Health Insurance Markets With Regulated Competition: A Conceptual Framework and International Comparison

Richard C. van Kleef*, Mieke Reuser, Thomas G. McGuire, John Armstrong, Konstantin Beck, Shuli Brammli-Greenberg, Randall P. Ellis, Francesco Paolucci, Erik Schokkaert, Juergen Wasem

*Corresponding author for this work

Research output: Contribution to journalReview articlepeer-review

Abstract

In health insurance markets with regulated competition, regulators face the challenge of preventing risk selection. This paper provides a framework for analyzing the scope (i.e., potential actions by insurers and consumers) and incentives for risk selection in such markets. Our approach consists of three steps. First, we describe four types of risk selection: (a) selection by consumers in and out of the market, (b) selection by consumers between high- and low-value plans, (c) selection by insurers via plan design, and (d) selection by insurers via other channels such as marketing, customer service, and supplementary insurance. In a second step, we develop a conceptual framework of how regulation and features of health insurance markets affect the scope and incentives for risk selection along these four dimensions. In a third step, we use this framework to compare nine health insurance markets with regulated competition in Australia, Europe, Israel, and the United States.

Original languageAmerican English
JournalMedical Care Research and Review
Early online date29 Jan 2024
DOIs
StateE-pub ahead of print - 29 Jan 2024

Bibliographical note

Publisher Copyright:
© The Author(s) 2024.

Keywords

  • health insurance
  • international comparison
  • regulated competition
  • risk selection

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