NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Does it Matter if Your Health Insurer is For-Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending

Leemore Dafny, Subramaniam Ramanarayanan

NBER Working Paper No. 18286
Issued in July 2012
NBER Program(s):   AG   HC   IO

The majority of private health insurance in the U.S. is administered or issued by for-profit insurers, but little is known about how for-profit status affects outcomes. We find that plausibly exogenous increases in local for-profit market share induced by conversions of Blue Cross and Blue Shield affiliates in 11 states (and 28 distinct geographic markets) had no significant impact on average premiums, uninsurance rates, or medical loss ratios. However, we do find significant increases in Medicaid enrollment and a reallocation of medical spending toward rivals of BCBS. Moreover, in markets where the converting BCBS affiliate had substantial market share, fully-insured premiums for employer plans increased significantly. The results suggest that the welfare effects of subsidies for new not-for-profit insurers, such as those in the Affordable Care Act, are likely to depend on entrants' eventual market share.

download in pdf format
   (377 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (377 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w18286

Users who downloaded this paper also downloaded these:
Dafny, Duggan, and Ramanarayanan w15434 Paying a Premium on Your Premium? Consolidation in the U.S. Health Insurance Industry
Hendren w18282 Private Information and Insurance Rejections
Aron-Dine, Einav, Finkelstein, and Cullen w17802 Moral Hazard in Health Insurance: How Important Is Forward Looking Behavior?
Courtemanche and Zapata w17893 Does Universal Coverage Improve Health? The Massachusetts Experience
Ericson and Starc w18089 Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us