TY  - JOUR
AU  - Cutler,David M.
AU  - Lincoln,Bryan
AU  - Zeckhauser,Richard J.
TI  - Selection Stories: Understanding Movement Across Health Plans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15164
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15164
L1  - http://www.nber.org/papers/w15164.pdf
N1  - Author contact info:
David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu

Bryan Lincoln
Office of the Attorney General
Commonwealth of Massachusetts
One Ashburton Place
Boston, MA 02108
E-Mail: Bryan.Lincoln@ago.state.ma.us

Richard J. Zeckhauser
John F. Kennedy School of Government
Harvard University
79 John F. Kennedy Street
Cambridge, MA  02138
Tel: 617/495-1174
Fax: 617/384-9340
E-Mail: richard_zeckhauser@harvard.edu
AB  - This study assesses the factors influencing the movement of people across health plans.  We distinguish three types of cost-related transitions: adverse selection, the movement of the less healthy to more generous plans; adverse retention, the tendency for people to stay where they are when they get sick; and aging in place, where lack of all movement makes plans with initially older enrollees increase in cost over time.  Using data from the Group Insurance Commission in Massachusetts, we show that aging in place and adverse selection are both quantitatively important.  Each can materially impact equilibrium enrollments, especially when premiums to enrollees reflect these costs.
ER  -