The Role of Agents and Brokers in the Market for Health Insurance

Pinar Karaca†Mandic, Roger Feldman and Peter Graven

Journal of Risk & Insurance, 2018, vol. 85, issue 1, 7-34

Abstract: Health insurance markets in the United States are characterized by imperfect information, complex products, and substantial search frictions. Insurance agents and brokers play a significant role in helping employers navigate these problems. However, little is known about the relations between the structure of the agent/broker market and access and affordability of insurance. This article aims to fill this gap by investigating the influence of agents/brokers on health insurance offering decisions of small firms, which are particularly vulnerable to problems of financing health insurance. Using a unique membership database from the National Association of Health Underwriters together with a nationally representative survey of employers, we find that small firms in more competitive agent/broker markets are more likely to offer health insurance and at lower premiums. Moreover, premiums are less dispersed in more competitive agent/broker markets.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:85:y:2018:i:1:p:7-34

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