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Job market paper minimum standards and insurance regulation: evidence from the medigap market (2001).
| Content Provider | CiteSeerX |
|---|---|
| Author | Finkelstein, Amy |
| Abstract | This paper examines the consequences of imposing binding minimum standards on the market for voluntary private health insurance for the elderly. Theoretically, the effect of these standards on insurance coverage and on welfare is ambiguous. I find robust evidence of a substantial decline in insurance associated with the minimum standards. The central estimates suggest that the standards are associated with an 8 percentage point (25 percent) decrease in the proportion of the population with coverage in the affected market; I find no evidence of substitution to other, unregulated sources of insurance coverage. I also find evidence that the minimum standards may have reduced the coverage of non-mandated benefits among the insured. I consider several models of how minimum standards might interact with the private market equilibrium. The results are most consistent with certain models of insurance markets with adverse selection. The final section of the paper considers the welfare implications of the changes in risk bearing associated with the imposition of the minimum standards. The results suggest that the imposition of these standards was, even under relatively conservative assumptions, welfare reducing on net. |
| File Format | |
| Publisher Date | 2001-01-01 |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
