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Results for “Insurance Selection Bias”

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At least 19 recordsLinked to original sources
PubMed1991

A method for risk-adjusting employer contributions to competing health insurance plans.

Biased selection can threaten the viability of multiple choice health systems unless payments to particular plans are adjusted to offset risk differences among employees. We report the results of a study designed to predict medical care utilization and expenditures for groups of fee-for-service plan (FFS) and health maintenance organization (HMO) enrollees, using characteristics commonly available in the personnel files of large employers. Simulation analyses indicate that the six-equation, maximum likelihood model predicts well for groups of 1,000 or more. Additional data are required to reduce prediction errors for smaller groups. This new methodology potentially allows risk-rating of employer contributions to competing health plans, based on the expected utilization of the individuals choosing each plan.

Economic Competition↗
PubMed1990

Insurability and the HIV epidemic: ethical issues in underwriting.

The HIV epidemic has focused criticism on standard underwriting practices that exclude people with AIDS or at high risk for it from insurance coverage. Insurers have denied the charge that these practices are unfair, claiming instead that whatever is actuarially fair is fair or just. This defense will not work unless we assume that individuals are entitled to gain advantages and deserve losses merely as a result of their health status. That assumption is highly controversial at the level of theory and is inconsistent with many of our moral beliefs and practices, including our insurance practices. We should reject the insurers' argument. Justice in health care requires that we protect equality of opportunity, and that implies sharing the burden of protecting people against health risks. In a just healthcare system, whether mixed or purely public, the insurance scheme is in systematic terms actuarially unfair, for its overall social function must be to guarantee access to appropriate care. This does not mean that in our system insurers are ignoring their obligation to provide access to coverage. The obligation to assure access is primarily a social one, and the failures of access in our system are the result of public failures to meet those obligations. In a just but mixed system, there would be an explicit division of responsibility among public and private insurance schemes. In our mixed but unjust system, both legislators and insurers cynically pretend that the uninsured are the responsibility of the other. The attempt to treat actuarial fairness as a moral notion thus disguises what is really at issue, namely, the risk to insurers of adverse selection and the economic advantages of standard underwriting practices. Standard underwriting practices will be fair only if they are part of a just system, not if they simply are actuarially fair. The failure of the argument from actuarial fairness means that we must face an issue private insurers had hoped to avoid if we are to defend standard underwriting practices at all. In view of the clear risk that a mixed system will fail to assure access to care, the burden falls on defenders of a mixed system. They must show us that its social benefits outweigh its social costs, and that it is possible to have a mixed system that is not only just, but also is superior to a compulsory, universal insurance scheme.

Acquired Immunodeficiency Syndrome↗
PubMed1989

The role of health practices in HMO selection bias: a confirmatory study.

This research examines the relation between employees' health practices and health plan selection. A previous study, limited to one firm, showed that employees choosing a health maintenance organization (HMO) and a fee-for-service (FFS) plan had similar health practices. We extend this inquiry to 17 Minneapolis employees, all of whom offer at least one FFS plan and one or more of the 6 Twin Cities HMOs. Health practices were measured by cigarette smoking, heavy drinking (or abstinence from drinking), use of seat belts, and exercise. We estimated health plan choice equations that show that employees with poor health practices do not systematically prefer FFS plans compared with independent practice associations (IPAs). Nor do they select FFS or IPA plans compared with HMOs on the basis of health habits. We suggest that HMOs do not gain long-term cost advantages by enrolling employees with favorable health practices.

Choice Behavior↗
PubMed1994

Eating disorders and health insurance.

Eating disorders are being diagnosed and managed by an increasing number of pediatricians and practitioners of adolescent medicine. These physicians are increasingly discovering the power and importance of their patients' health insurance status in the management of these conditions because the lack of appropriate insurance may often pose obstacles and barriers to care. This article provides an analysis of this situation through brief case presentations followed by a discussion and recommendations.

Adolescent↗
PubMed1995

Health insurance access to young adult survivors of childhood cancer in North Carolina.

Historically, there has been evidence to support the hypothesis that survivors of childhood cancer have been discriminated against in the private health insurance market in some areas of the United States. Results of previous studies have been inconsistent and have generally focused on a limited number of outcome variables. A retrospective cohort study of young adult survivors of childhood cancer and their siblings was performed to determine the risk of health insurance access problems of childhood cancer survivors in North Carolina. Mailed questionnaires were completed by 182 cancer survivors from three institutions who were diagnosed between 1976 and 1988, and by 101 of their siblings for a response of 62.1%. Using logistic regression in SAS, cancer survivors were found to be more likely to be denied health insurance than their siblings, with an adjusted odds ratio of 15.1. Childhood cancer survivors also had health insurance policies that excluded care for pre-existing medical conditions more often than their siblings (OR = 5.5). In addition, cancer survivors reported problems obtaining health insurance coverage more frequently than their siblings with an adjusted odds ratio of 22.8. In general, survivors of childhood cancer who were diagnosed in North Carolina have had decreased access to health insurance coverage when compared to their siblings of similar age. North Carolina health insurance regulations permit health insurance firms to discriminate against cancer survivors because of their history of illness, often decreasing their access to needed follow-up care.

Adult↗
PubMed1992

Towards a capitation formula for competing health insurers. An empirical analysis.

In many countries the concept of capitating health care insurers is receiving increasing attention. The main reason is, that capitation may induce health care insurers in a competitive environment to concentrate more on cost containment. However, if the adjusters on which capitation payments are based, are too global, there may be ample room for risk selection by the insurers whilst also an unfair distribution of funds over the insurers may result, thereby undermining the objectives of capitation. The prime motivation for the present study is, that the Dutch government, as part of proposals for a new, market oriented structure of health care system, is considering to capitate insurers on the basis of global parameters like age, gender and location. Our analysis based on panel data of some 35,000 individuals, shows that the proportion of variance in annual health care expenditures that can be predicted (R2) by such a global capitation formula, is only 0.024. This is less than 1/5 of our estimate of the theoretically maximum achievable R2 which amounts to 0.138, implying the existence of abundant selection opportunities, e.g. on the basis of past expenditures or other health indicators. Alternative capitation formulae incorporating prior-year's costs and reaching about 3/5 of the maximum obtainable R2, effectively remove the profitableness of selection on the basis of past expenditures. The findings suggest, however, that selection via (chronic) health status may still be profitable to some extent. Therefore, we also analyzed data from the Dutch Health Interview Survey (N approximately 20,000) which comprised better health indicators. It appeared that a capitation formula based on the global adjusters mentioned above as well as three health status indicators and several background characteristics, yields an R2 of about 0.114, which probably accounts for 3/4 of our estimate of the maximum obtainable R2. The main conclusion is, that in the short term information on prior expenditures, which is available in the files of most insurers and thus may be used for risk selection, should be included in the capitation formula. For the more distant future, the formula should be expanded with indicators of chronic health status, possibly based on diagnostic information from previous, non-discretionary hospitalizations.

Age Factors↗
PubMed1989

Adjusting employer group capitation premiums by Community Rating by class factors.

Community rating of employer group health maintenance organization (HMO) capitation premiums results in low premiums for some groups and high premiums for other groups, as compared with the marginal costs of providing services. In effect, low health risk groups are cross subsidizing high health-risk groups in an HMO. This has caused several inefficiencies in the health plan marketplace, which have directly benefited higher-risk groups. For this reason, certain low-risk groups are searching for new strategies to improve market efficiency. One strategy is Community Rating by Class (CRC), a system which adjusts community rated capitation premiums by broad-based risk factors. This article examines CRC as a strategy to help reduce the inefficiencies caused by current federal regulations. In regressions predicting future year total family health expenditures, the CRC Model achieved an R2 value of 0.211. This value was over half the R2 value of an experience rated approach, based on prior year utilization and expenditure variables. Family size accounted for 80% of the variance explained by the CRC Model. The results indicate that the CRC rating approach may be a good mechanism to correct for cross subsidization of employer group capitation premiums.

Adolescent↗
PubMed1992

The inequality of medical expenditures for several years in a healthy, nonelderly population.

Previous studies have shown that the distribution of annual medical expenditures for a population is very unequal and remains so for periods of more than 1 year. The authors use a better measure of inequality, the Gini coefficient, to test its persistence for longer periods. This measure is applied to data collected from the Rand Health Insurance Experiment. The experiment enrolled a nonelderly population typical of those covered by employer health plans for periods up to 5 years. The distributions of annual expenditures for this population are highly unequal, in line with previous studies. Inequality declines substantially when longer periods are considered.

Adolescent↗
PubMed1995

Risk adjusting community rated health plan premiums: a survey of risk assessment literature and policy applications.

This paper surveys recent health care reform debates and empirical evidence regarding the potential role for risk adjusters in addressing the problem of competitive risk segmentation under capitated financing. We discuss features of health plan markets affecting risk selection, methodological considerations in measuring it, and alternative approaches to financial correction for risk differentials. The appropriate approach to assessing risk differences between health plans depends upon the nature of market risk selection allowed under a given reform scenario. Because per capita costs depend on a health plan's population risk, efficiency, and quality of service, risk adjustment will most strongly promote efficiency in environments with commensurately strong incentives for quality care.

Actuarial Analysis↗
PubMed1994

Notes from the insurance underground: how the chronically ill cope.

This report from the field is an account of the experience of individuals with multiple sclerosis (MS) in Indiana in getting and keeping private health insurance. The report presents the findings of a telephone survey of individuals with MS in Indiana. While survey respondents were generally able to obtain health insurance through the Medicare program or employer-based private health insurance plans, many experienced formidable barriers to adequate and affordable health insurance, such as preexisting exclusions, cancellations, high premiums, and coinsurance. Respondents adopted a variety of strategies to keep private health insurance, including selectivity in submitting claims, which worked to reduce their health insurance coverage. Our findings raise two crucial questions: (1) to what extent are the chronically ill forced to take extraordinary measures to get and keep health insurance? and (2) to what extent do insurer practices in pricing insurance and determining coverage of benefits actually make health insurance even more inadequate and unaffordable for the chronically ill? These two questions are critical in understanding the full dimensions of the health insurance crisis in the United States today.

Actuarial Analysis↗
PubMedDate not supplied

Prescription drugs and the elderly: issues and options.

This paper examines the elderly's need for prescription drug insurance, the extent and depth of current coverage supplementary to Medicare, the characteristics of those who have coverage and those who do not, and the problem of adverse selection in individual insurance for prescription drugs. It also discusses the issues that must be resolved in choosing the direction public policy should take if more of the elderly are to be covered and examines the advantages and disadvantages of four illustrative public policy options, ranging from small expansions of Medicaid benefits through "Medigap" regulation to Medicare coverage for all elderly.

Aged↗