Does it Matter if Your Health Insurer is For-Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending

Leemore Dafny and Subramaniam Ramanarayanan

No 18286, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The majority of private health insurance in the U.S. is administered or issued by for-profit insurers, but little is known about how for-profit status affects outcomes. We find that plausibly exogenous increases in local for-profit market share induced by conversions of Blue Cross and Blue Shield affiliates in 11 states (and 28 distinct geographic markets) had no significant impact on average premiums, uninsurance rates, or medical loss ratios. However, we do find significant increases in Medicaid enrollment and a reallocation of medical spending toward rivals of BCBS. Moreover, in markets where the converting BCBS affiliate had substantial market share, fully-insured premiums for employer plans increased significantly. The results suggest that the welfare effects of subsidies for new not-for-profit insurers, such as those in the Affordable Care Act, are likely to depend on entrants' eventual market share.

JEL-codes: I11 I13 L22 L33 (search for similar items in EconPapers)
Date: 2012-07
Note: AG EH IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Leemore Dafny, 2019. "Does It Matter if Your Health Insurer Is For Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending," American Economic Journal: Economic Policy, vol 11(1), pages 222-265.

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