Title: Efficiency in Plan Choice with Risk Adjustment and Risk-based Pricing in Health Insurance Exchanges

Speaker: Julie Shi

Abstract: This paper explores the impacts of risk adjustment and risk-based pricing on the efficiency of consumer insurance selection in the Health Insurance Exchanges created by the Affordable Care Act. Selecting a population likely to participate in the Health Insurance Exchanges from the Medical Expenditure Panel Survey, I simulate consumer choice between plans with different levels of generosity under various scenarios of policy implementation. The results show that risk-based pricing could in general improve or impair the efficiency, depending on the heterogeneity of health care spending of the enrollees and the selection of rating bands, while risk adjustment always encourages consumers to enroll in the more generous plans, which in the model implies improvement in efficiency.

About Julie Shi: Assistant Professor, School of Economics, Peking University

Date: Nov,25th, 2015

Time: 13:30-14:50 PM

Location: Room 602, Academic Hall, CUFE