MPC Member Publications

This database contains a listing of population studies publications written by MPC Members. Anyone can add a publication by an MPC student, faculty, or staff member to this database; new citations will be reviewed and approved by MPC administrators.

Full Citation

Title: Same Game, Different Names: Cream-Skimming in the Post-ACA Individual Health Insurance Market

Citation Type: Journal Article

Publication Year:

DOI: 10.1177/0046958020933765

Abstract: journals.sagepub.com/home/inq What do we already know about this topic? Adverse selection is a concern in the individual insurance market, and premiums have risen rapidly in recent years. How does your research contribute to the field? We show that state policy decisions-and in particular their decision to allow continued enrollment in Affordable Care Act noncompliant health insurance plans in the individual insurance market-are highly associated with health care costs of Affordable Care Act-compliant plans. What are your research's implications toward theory, practice, or policy? Current policy to permit the sale of noncompliant plans may have an impact on premiums of compliant plans. Abstract One of the Affordable Care Act's (ACA) signature reforms was creating centralized Health Insurance Marketplaces to offer comprehensive coverage in the form of comprehensive insurance complying with the ACA's coverage standards. Yet, even after the ACA's implementation, millions of people were covered through noncompliant plans, primarily in the form of continued enrollment in "grandmothered" and "grandfathered" plans that predated ACA's full implementation and were allowed under federal and state regulations. Newly proposed and enacted federal legislation may grow the noncompliant segment in future years, and the employment losses of 2020 may grow reliance on individual market coverage further. These factors make it important to understand how the noncompliant segment affects the compliant segment, including the Marketplaces. We show, first, that the noncompliant segment of the individual insurance market substantially outperformed the compliant segment, charging lower premiums but with vastly lower costs, suggesting that insurers have a strong incentive to enter the noncompliant segment. We show, next, that state's decisions to allow grandmothered plans is associated with stronger financial performance of the noncompliant market, but weaker performance of the compliant segment, as noncompliant plans attract lower-cost enrollees. This finding indicates important linkages between the noncompliant and compliant segments and highlights the role state policy can play in the individual insurance market. Taken together, our results point to substantial cream-skimming, with noncompliant plans enrolling the healthiest enrollees, resulting in higher average claims cost in the compliant segment.

Url: https://doi.org/10.1177/0046958020933765

User Submitted?: No

Authors: Sacks, Daniel W; Drake, Coleman; Abraham, Jean Marie; Simon, Kosali

Periodical (Full): INQUIRY: The Journal of Health Care Organization, Provision, and Financing

Issue:

Volume: 57

Pages: 1-9

Countries:

IPUMS NHGIS NAPP IHIS ATUS Terrapop