Minimum coverage regulation in insurance markets
McFadden, Daniel (University of California. Department of Economics)
Noton, Carlos (Universidad de Chile. Departmento de Ingeniería Industrial)
Olivella, Pau (Universitat Autònoma de Barcelona. Departament d'Economia i d'Història Econòmica)

Date:	2015
Abstract:	We study the consequences of imposing a minimum coverage in an insurance market where enrollment is mandatory and agents have private information on their true risk type. If the regulation is not too stringent, the equilibrium is separating in which a single insurer monopolizes the high risks while the rest attract the low risks, all at positive profits. Hence individuals, regardless of their type, "subsidize" insurers. If the legislation is sufficiently stringent the equilibrium is pooling, all insurers just break even and low risks subsidize high risks. None of these results require resorting to non-Nash equilibrium notions.
Grants:	Ministerio de Economía y Competitividad ECO2012-31962
Note:	Altres ajuts: P01AG005842
Note:	Altres ajuts: RC4AG039036
Note:	Altres ajuts: ICMIS130002
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
Language:	Anglès
Document:	Article ; recerca ; Versió publicada
Subject:	Health insurance ; Mandatory enrollment ; Minimum coverage regulation ; Asymmetric information ; Market equilibrium ; Cross-subsidization
Published in:	Series, Vol. 6 (2015) , p. 247-278, ISSN 1869-4195

DOI: 10.1007/s13209-015-0126-1

34 p, 1.2 MB

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