Sources of Advantageous Selection: Evidence From the Medigap Insurance Market
- Topics:
- Insurance
- Tags:
- Benefits,
- Enterprise Software,
- Expenditure,
- Health Care,
- Healthcare,
- Human Resources,
- Software,
- Vertical Industries,
- Yale University
- Source:
- Yale University
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Overview: This paper provides strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, the authors find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage are, on average, about $4,000 less than for those without. But, if one were to condition on health, expenditures for seniors on Medigap are about $2,000 more. These two findings can only be reconciled if those with less health expenditure risk are more likely to purchase Medigap, implying advantageous selection.
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Format: PDF | Size: 443KB | Date: Jun 2006 | Pages: 62
