Participation in a public insurance program: subsidies, crowd-out, and adverse selection.
This paper examines how varying the level of subsidies affects participation in a public insurance program, crowd-out of private insurance, and adverse selection. We study the experience in Washington's Basic Health program in 1997. Findings show that adverse selection is not a problem in voluntary public programs. Increasing subsidies have only modest effects on participation in subsidized programs, though the gains are not at the expense of the private market. Overall participation in the subsidized plan is also modest, even though participants benefit from it. The challenge to policymakers is to find program design characteristics, beyond subsidies, that attract the uninsured.
Long
Stephen H
SH
RAND, Arlington, VA 22202, USA.
Marquis
M Susan
MS
D000293:Adolescent; D000328:Adult; D002648:Child; D003256:Community Participation / Q000191:economics / Q000706:statistics & numerical data*; D004608:Eligibility Determination; D005260:Female; D006302:Health Services Research; D006304:Health Status; D006801:Humans; D019458:Insurance Coverage; D015273:Insurance Selection Bias; D008297:Male; D008329:Managed Care Programs / Q000191:economics* / Q000706:statistics & numerical data; D008484:Medicaid / Q000458:organization & administration; D017057:Medically Uninsured / Q000706:statistics & numerical data*; D008875:Middle Aged; D019982:Organizational Case Studies; D011203:Poverty / Q000145:classification; D015397:Program Evaluation; D013221:State Health Plans / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States; D014861:Washington