Government as reinsurer for very-high-cost persons in nongroup health insurance markets.
Fear of adverse selection drives carriers in nongroup insurance markets to compete in their use of selection mechanisms to screen out high-risk applicants. This contributes to economic inefficiency. Government could assume the role of reinsurer, by assuming responsibility for most of the costs of people who are in the highest 2-3 percent of the national spending distribution. This would spread the burden of costs of very-high-cost persons to the broad population base and could cause premiums to fall as carriers spend less on efforts to avoid adverse selection.
Swartz
Katherine
K
Department of Health Policy and Management Harvard School of Public Health, Boston, USA.
D017598:Efficiency, Organizational; D005380:Financing, Government; D006078:Government Programs; D005102:Health Expenditures / Q000331:legislation & jurisprudence*; D006304:Health Status; D006801:Humans; D015273:Insurance Selection Bias; D007348:Insurance, Health / Q000145:classification / Q000191:economics* / Q000331:legislation & jurisprudence; D011057:Politics; D012935:Social Justice; D014481:United States