Group Health Insurance: A Hedonic Price Approach

Gail A Jensen and Michael Morrisey

The Review of Economics and Statistics, 1990, vol. 72, issue 1, 38-44

Abstract: The authors examine the premium consequences of alternative health insurance provisions by estimating pricing regressions for group insurance with data on 9,019 fee-for-service plans offered by larger firms in the private sector. They find that cost-sharing at the point of purchase, especially for hospital care, significantly lowers fee-for-service premiums. However, some aspects of plan design that are often touted as cost-reducing, such as self-insuring or offering employees the option to join a health maintenance organization, are found to increase premiums. Coverage of alcoholism/chemical dependency treatments, inpatient mental health care, and psychologists' services, which are mandated in many states, are found to be expensive. Copyright 1990 by MIT Press.

Date: 1990
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