Employment and Adverse Selection in Health Insurance

Bhattacharya Jayanta () and Vogt William B.
Additional contact information
Bhattacharya Jayanta: Center for Primary Care and Outcomes Research, Stanford Medical School, 117 Encina Commons, Stanford, CA 94305-6019, USA
Vogt William B.: Department of Economics, University of Georgia, Terry College of Business, 513 Brooks Hall, Athens, GA 30602, USA

Forum for Health Economics & Policy, 2014, vol. 17, issue 1, 79-104

Abstract: We construct and test a new model of employer-provided health insurance provision in the presence of adverse selection in the health insurance market. In our model, employers cannot observe the health of their employees, but can decide whether to offer insurance. Employees sort themselves among employers who do and do not offer insurance on the basis of their current health status and the probability distribution over future health status changes. We show that there a pooling equilibrium is more likely when the costs of switching jobs are high or when health status is not persistent. We test and verify some of the key implications of our model using data from the Current Population Survey, linked to information provided by the US Department of Labor about the job-specific human capital requirements of jobs.

Keywords: adverse selection; Affordable Care Act; employee benefits; health insurance; medical spending (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1515/fhep-2013-0017 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:fhecpo:v:17:y:2014:i:1:p:26:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/fhep/html

DOI: 10.1515/fhep-2013-0017

Access Statistics for this article

Forum for Health Economics & Policy is currently edited by Dana Goldman

More articles in Forum for Health Economics & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().