TY  - JOUR
AU  - McFadden,Daniel L.
AU  - Noton,Carlos E.
AU  - Olivella,Pau
TI  - Remedies for Sick Insurance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17938
PY  - 2012
Y2  - March 2012
UR  - http://www.nber.org/papers/w17938
L1  - http://www.nber.org/papers/w17938.pdf
N1  - Author contact info:
Daniel L. McFadden
University of California, Berkeley
Department of Economics
549 Evans Hall #3880
Berkeley, CA 94720-3880
Tel: 510/643-8428
Fax: 510/642-0638
E-Mail: mcfadden@econ.berkeley.edu

Carlos E. Noton
Department of Industrial Engineering
University of Chile
Republica 701, Santiago
Chile
E-Mail: cnoton@dii.uchile.cl

Pau Olivella
Departament Economia i Historia Economica
Universitat Autonoma de Barcelona
08193 Cerdanyola del Valles
Barcelona 
Spain
E-Mail: pau.olivella@uab.es
AB  - This expository paper describes the factors that contribute to failure of health insurance markets, and the regulatory mechanisms that have been and can be used to combat these failures.  Standardized contracts and creditable coverage mandates are discussed, along with premium support, enrollment mandates, guaranteed issue, and risk adjustment, as remedies for selection-related market damage.  An overall conclusion of the paper is that the design and management of creditable coverage mandates are likely to be key determinants of the performance of the health insurance exchanges that are a core provision of the PPACA of 2010.  Enrollment mandates, premium subsidies, and risk adjustment can improve the stability and relative efficiency of the exchanges, but with carefully designed creditable coverage mandates are not necessarily critical for their operation.
ER  -