Selection Stories: Understanding Movement Across Health Plans
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.
We are grateful to the GIC for providing access to the data, and the National Institute on Aging (P01 AG005842) for research support. The GIC data do not include any individual identifying information. Bryan Lincoln's work was done previous to employment at the Mass. Attorney General. This paper does not represent the views of any institution with which the authors are affiliated or the National Bureau of Economic Research.
- Most non-elderly Americans who have health insurance receive their coverage through an employer. Many workers are offered a choice among...
Cutler, David & Lincoln, Bryan & Zeckhauser, Richard, 2010. "Selection stories: Understanding movement across health plans," Journal of Health Economics, Elsevier, vol. 29(6), pages 821-838, December. citation courtesy of