Do health plans risk-select? An audit study on Germany's Social Health Insurance

Sebastian Bauhoff

Journal of Public Economics, 2012, vol. 96, issue 9-10, 750-759

Abstract: This paper evaluates whether health plans in Germany's Social Health Insurance select on an easily observable predictor of risk: geography. To identify plan behavior separately from concurrent demand-side adverse selection, I implement a double-blind audit study in which plans are contacted by fictitious applicants from different locations. I find that plans are less likely to respond and follow-up with applicants from higher-cost regions, such as West Germany. The results suggest that supply-side selection may emerge even in heavily regulated insurance markets. The prospect of risk selection by firms has implications for studies of demand-side selection and regulatory policy in these settings.

Keywords: Health insurance; Risk selection; Risk adjustment; Geographic variations; Germany (search for similar items in EconPapers)
JEL-codes: H5 I18 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (57)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:96:y:2012:i:9:p:750-759

DOI: 10.1016/j.jpubeco.2012.05.011

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