Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange

Keith Ericson and Amanda Starc
Additional contact information
Amanda Starc: University of Pennsylvania

The Review of Economics and Statistics, 2015, vol. 97, issue 3, 667-682

Abstract: We analyze insurance-pricing regulation under imperfect competition on the Massachusetts health insurance exchange. Differential markups lead to price variation apart from cost variation. Coarse insurer pricing strategies identify consumer demand. Younger consumers are twice as price sensitive as older consumers. Older consumers thus face higher markups over costs. Modified community rating links prices for consumers differing in both costs and preferences, and changes the marginal consumer firms face. Stricter regulations transfer resources from low-cost to high-cost consumers, reduce firm profits, and increase overall consumer surplus.

Keywords: price regulation; imperfect competition; massachusetts; massachusetts health insurance exchange; insurance; insurance-pricing; age differences; consumers; price markups (search for similar items in EconPapers)
JEL-codes: I11 I13 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (38)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00514 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Pricing Regulation and Imperfect Competition on the Massachusetts Health Insurance Exchange (2012)
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:tpr:restat:v:97:y:2015:i:2:p:667-682

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().