Enter at Your Own Risk: HMO Participation and Enrollment in the MedicareRisk Market

Jean Abraham, Ashish Arora (), Martin Gaynor () and Douglas Wholey

No 7385, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine HMO participation and enrollment in the Medicare risk market for the years 1990 to 1995. We develop a profit- maximization model of HMO behavior, which explicitly considers potential linkages between an HMO's production decision in the commercial enrollee market and its participation and production decisions in the Medicare risk market. Our results suggest that the payment rate is a primary determinant of HMO participation, while the price of a supplemental Medicare insurance policy positively affects HMO Medicare enrollment. We also find empirical support for the existence of complementarities in the joint production of an HMO's commercial and Medicare products.

JEL-codes: I1 L1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea, nep-ias and nep-pbe
Date: 1999-10
Note: HC
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