Incentives for risk selection and omitted variables in the risk adjustment formula

Erik Schokkaert and Carine Van De Voorde

Annals of Economics and Statistics, 2006, issue 83-84, 327-351

Abstract: Risk adjustment in health insurance raises the question of how to treat variables which influence health care expenditures but do not capture acceptable costs differences. We argue that these variables should be included in the explanatory model and neutralized afterwards for the computation of the premium subsidies. This explicit approach is better than the conventional approach in removing the incentives for cream-skimming. We illustrate the empirical relevancy of the problem with data for Belgium.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.jstor.org/stable/20079173 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2006:i:83-84:p:327-351

Access Statistics for this article

Annals of Economics and Statistics is currently edited by Laurent Linnemer

More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Laurent Linnemer ().