Jove
Visualize
Contact Us
JoVE
x logofacebook logolinkedin logoyoutube logo
ABOUT JoVE
OverviewLeadershipBlogJoVE Help Center
AUTHORS
Publishing ProcessEditorial BoardScope & PoliciesPeer ReviewFAQSubmit
LIBRARIANS
TestimonialsSubscriptionsAccessResourcesLibrary Advisory BoardFAQ
RESEARCH
JoVE JournalMethods CollectionsJoVE Encyclopedia of ExperimentsArchive
EDUCATION
JoVE CoreJoVE BusinessJoVE Science EducationJoVE Lab ManualFaculty Resource CenterFaculty Site
Terms & Conditions of Use
Privacy Policy
Policies

Related Experiment Videos

Adverse selection with a multiple choice among health insurance plans: a simulation analysis.

M S Marquis1

  • 1RAND Corporation, Washington, DC.

Journal of Health Economics
|July 7, 1992
PubMed
Summary
This summary is machine-generated.

Related Concept Videos

You might also read

Related Articles

Articles linked to this work by shared authors, journal, and citation graph.

Sort by
Same author

Employer health insurance and local labor market conditions.

International journal of health care finance and economics·2003
Same author

How widespread is managed competition?

Data bulletin (Center for Studying Health System Change)·2003
Same author

Trends in the cost of employer-sponsored coverage.

Data bulletin (Center for Studying Health System Change)·2003
Same author

Trends in offering employer-sponsored coverage.

Data bulletin (Center for Studying Health System Change)·2003
Same author

Effects of "second generation" small group health insurance market reforms, 1993 to 1997.

Inquiry : a journal of medical care organization, provision and financing·2002
Same author

Low-wage workers and health insurance coverage: can policymakers target them through their employers?

Inquiry : a journal of medical care organization, provision and financing·2002
Same journal

Competition matters: Uniform vs. indication-based pricing of pharmaceuticals.

Journal of health economics·2026
Same journal

Integrating equity and productivity in health evaluation.

Journal of health economics·2026
Same journal

Income and immunity: The consequences of social security administration reform for childhood infection risk.

Journal of health economics·2026
Same journal

When fewer children mean shorter lives: Fertility policy and elderly well-being in China.

Journal of health economics·2026
Same journal

Health dynamics and reporting bias at retirement: An analysis using high-frequency data.

Journal of health economics·2026
Same journal

Intertemporal coordination in volunteer markets.

Journal of health economics·2026
See all related articles

Adverse selection can eliminate high-benefit insurance plans when premiums are experience-rated. Varying premiums by demographics or using supplementary insurance markets significantly reduces this adverse selection effect.

Area of Science:

  • Health economics
  • Insurance markets
  • Risk management

Background:

  • Adverse selection occurs when individuals with higher risk are more likely to purchase insurance.
  • Accurate risk forecasting by families influences insurance purchase decisions.
  • Understanding adverse selection is crucial for insurance market stability.

Purpose of the Study:

  • To quantify the impact of adverse selection on insurance markets using simulation.
  • To investigate how different premium structures affect adverse selection.
  • To analyze adverse selection in supplementary insurance markets.

Main Methods:

  • Simulation modeling to assess adverse selection effects.
  • Utilizing data on family risk perception and insurance purchasing behavior.

Related Experiment Videos

  • Comparative analysis of single, experience-rated premiums versus demographic-rated premiums.

    • Main Results:

    • Single, experience-rated premiums can lead to the elimination of high-option benefit plans due to adverse selection.
    • Adverse selection is substantially mitigated when premiums are adjusted based on demographic factors.
    • Supplementary insurance markets exhibit restricted adverse selection due to underpricing of benefits.

    Conclusions:

    • Insurance market design significantly influences the prevalence of adverse selection.
    • Premium setting strategies, such as demographic rating, can counteract adverse selection.
    • Supplementary insurance models may offer a more stable market alternative.