Supplemental health insurance in the Colombian managed care system: Adverse or advantageous selection?

The aim of this article is to estimate the type of selection that exists in the supplemental health insurance market in Colombia where compulsory coverage is implemented through managed care competition. We build a panel database that combines individuals’ information from the Ministry of Health and a database provided by two private health insurers. We perform the correlation test for consumption of health services frequency and supplemental coverage. Following Fang et al. (2008), we condition the estimation on health controls that are available to the econometrician but not to insurers. In both cases we obtain a positive correlation, suggesting that adverse selection predominates. In order to rule out some moral hazard effects, we estimate the correlation between previous frequency of healthcare service consumption and supplemental insurance purchase. The positive correlation obtained is robust to the inclusion of controls for diagnosis implemented by health insurers, suggesting that despite some risk selection strategies, they are not protected from adverse selection. We conclude that some subsidies to supplemental coverage purchase would lower public expenditure in Colombia.     

The Australian health policy changes of 1999 and 2000

This article evaluates three measures introduced by the Australian Federal Government in 1999 and 2000 that were designed to encourage private health insurance and relieve financial pressure on the public healthcare sector. These policy changes were (i) a 30% premium rebate, (ii) health insurers offering lifetime enrolment on existing terms and the future relaxation of premium regulation by permitting premiums to increase with age, and (iii) a mandate for insurers to offer complementary coverage for bridging the gap between actual hospital billings and benefits paid. These measures were first evaluated in terms of expected benefits and costs at the individual level. In terms of the first criteria, the policy changes as a whole may have been efficiency-increasing. The Australian Government mandate to launch gap policies may well have created a spillover moral hazard effect to the extent that full insurance coverage encouraged policy holders to also use more public hospital services, thus undermining the government's stated objective to relieve public hospitals from demand pressure. Without this spillover moral hazard effect, there might have been a reduction in waiting times in the public sector. Secondly, the measures were evaluated in terms of additional benchmarks of the cost to the public purse, access and equity, and dynamic efficiency. Although public policy changes were found to be largely justifiable on the first set of criteria, they do not appear to be justifiable based on the second set. Uncertainties and doubts remain about the effect of the policy changes in terms of overall cost, access and equity, and dynamic efficiency. This is a common experience in countries that have considered shifts of their healthcare systems between the private and public sectors.     

Switching benefits and costs in competitive health insurance markets: A conceptual framework and empirical evidence from the Netherlands

Competitive health insurance markets will only enhance cost-containment, efficiency, quality, and consumer responsiveness if all consumers feel free to easily switch insurer. Consumers will switch insurer if their perceived switching benefits outweigh their perceived switching costs. We developed a conceptual framework with potential switching benefits and costs in competitive health insurance markets. Moreover, we used a questionnaire among Dutch consumers (1091 respondents) to empirically examine the relevance of the different switching benefits and costs in consumers’ decision to (not) switch insurer. Price, insurers’ service quality, insurers’ contracted provider network, the benefits of supplementary insurance, and welcome gifts are potential switching benefits. Transaction costs, learning costs, ‘benefit loss’ costs, uncertainty costs, the costs of (not) switching provider, and sunk costs are potential switching costs. In 2013 most Dutch consumers switched insurer because of (1) price and (2) benefits of supplementary insurance. Nearly half of the non-switchers – and particularly unhealthy consumers – mentioned one of the switching costs as their main reason for not switching. Because unhealthy consumers feel not free to easily switch insurer, insurers have reduced incentives to invest in high-quality care for them. Therefore, policymakers should develop strategies to increase consumer choice.     

荷兰健康保险制度改革经验及启示

文章对荷兰健康保险制度改革的历史过程以及现状进行描述分析,总结荷兰健康保险制度改革的特点：建立基于管理型竞争的强制性私立健康保险;私立保险方竞争获得更多的参保人员;政府对保险方和提供者的行为进行监管并提供相关信息;建立了风险均等化制度,消除不同保险方的风险差异。荷兰健康保险制度改革为我国健康保险制度进一步完善提供一些借鉴：消除不同健康保险制度的差距,保障一致性;建立风险均等化制度,调整不同基金池间的风险;商业保险机构参与经办健康保险管理服务;加强医保第三方对供方行为的制约和监督。     

Health Insurance Coverage of the Children of Immigrants in the United States

Objectives: This study assesses the health insurance coverage of children of immigrants in the United States and variations among immigrant groups. Method: The study uses data from the March supplements of the 1994 and 1996 Current Population Survey to compare health insurance coverage of children who report foreign parentage. Separate logistic regressions are conducted to estimate the likelihood of being covered by any insurance, public insurance, and private insurance. Results: 27.3% of all children of immigrants are without health insurance, 34.1% are on public insurance, and 44.3% have private insurance. Foreign-born children who have not yet become U.S. citizens are the most likely to be without health insurance (38.0%). Many of these children are not covered because their parents are unable to find jobs that provide coverage and Medicaid fails to enroll as many of them as possible. Overall, the children's chances of being covered by any health insurance vary little according to when their parents came to this country. However, children of recent immigrants are more likely to rely on public health insurance (40.1% vs. 24.8%) and less likely to be covered through private sources (36.8% vs. 60.6%) than those of established immigrants. Among immigrant groups, children of Haitian (48.4%) and Korean (45.3%) immigrants are at the highest risks of being uninsured. Both children of the Dominican Republic (65.9%) and Laos (83.3%) report high rates of public insurance coverage. Conclusions: Greater disparity in health insurance coverage among children of immigrants is expected once the new welfare reform bills take effect. In particular, noncitizen children, children of recent immigrants, illegal immigrants, and Dominican Republican immigrants will be affected most. Efforts aimed at reducing the harm should target these vulnerable groups.     

Transitions from private to public health coverage among children: estimating effects on out-of-pocket medical costs and health insurance premium costs

Objective. To assess the effects of transitions from private to public health insurance by children on out‐of‐pocket medical expenditures and health insurance premium costs. Data Sources. Data are drawn from the 1996 and 2001 panels of the Survey of Income and Program Participation. We construct a nationally representative, longitudinal sample of children, ages 0–18, and their families for the period 1998–2003, a period in which states raised public health insurance eligibility rates for children. Study Design. We exploit the Survey of Income and Program Participation's longitudinal design to identify children in our sample who transition from private to public health insurance. We then use a bootstrapped instrumental variable approach to estimate the effects of these transitions on out‐of‐pocket expenditures and health insurance premium costs. Principal Findings. Children who transition from private to public coverage are relatively low‐income, are disproportionately likely to live in single‐mother households, and are more likely to be Black or of Hispanic origin. Child health status is highly predictive of transitions. We estimate that these transitions provide a cash‐equivalent transfer of nearly U.S.$1,500 annually for families in the form of reduced out‐of‐pocket and health insurance premium costs. Conclusions. Transitions from private to public health coverage by children can bring important social benefits to vulnerable families. This suggests that instead of being a net societal cost, such transitions may provide an important social benefit.     

A Political History of Federal Mental Health and Addiction Insurance Parity

Context: This article chronicles the political history of efforts by the U.S. Congress to enact a law requiring “parity” for mental health and addiction benefits and medical/surgical benefits in private health insurance. The goal of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity (MHPAE) Act of 2008 is to eliminate differences in insurance coverage for behavioral health. Mental health and addiction treatment advocates have long viewed parity as a means of increasing fairness in the insurance market, whereas employers and insurers have opposed it because of concerns about its cost. The passage of this law is viewed as a legislative success by both consumer and provider advocates and the employer and insurance groups that fought against it for decades.Methods: Twenty-nine structured interviews were conducted with key informants in the federal parity debate, including members of Congress and their staff; lobbyists for consumer, provider, employer, and insurance groups; and other key contacts. Historical documentation, academic research on the effects of parity regulations, and public comment letters submitted to the U.S. Departments of Labor, Health and Human Services, and Treasury before the release of federal guidance also were examined.Findings: Three factors were instrumental to the passage of this law: the emergence of new evidence regarding the costs of parity, personal experience with mental illness and addiction, and the political strategies adopted by congressional champions in the Senate and House of Representatives.Conclusions: Challenges to implementing the federal parity policy warrant further consideration. This law raises new questions about the future direction of federal policymaking on behavioral health.     

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.     

Disability management, employee health and fringe benefits, and long-term-disability claims for mental disorders: an empirical exploration

Mental disorders account for a large share of claims and benefit costs in both private and public long-term-disability (LTD) insurance programs. This is the first empirical study to explore factors that may explain variations in private-sector LTD claims incidence and cost across groups of employees. Employee fringe-benefit arrangements, including patterns of coverage for mental health treatment, are found to be important predictors of incidence rates. Award rates for public disability insurance coverage (SSDI) are also strongly related to claims incidence, suggesting that private LTD is an important pathway to SSDI benefits. Some employee disability-management strategies, such as front-line manager involvement and provision of alternative jobs for employees returning from disability leave, are predictive of lower claims rates and/or costs.     

Out-of-pocket health expenditure differences in Chile: Insurance performance or selection?

Chile has a mixed health system with public and private actors engaged in provision and insurance. This dual system generates important differences in health expenditure between private and public insurances. Selection is a preeminent feature of the Chilean insurance system. In order to explain the role of the insurance in out-of-pocket expenditures between households for different insurance schemes, decomposition methods are applied to disentangle the effect of household ‘composition and insurance’ degree of financial protection on health expenditures. Health expenditure patterns have not changed in the last 10 years with drugs, outpatient care, and dental health representing 60% of the health expenditure. Health expenditure/income is similar for different income groups in the public insurance, but decreases with income in households with private coverage, reflecting regressivity in health expenditure. On the other hand, health expenditure as share of expenditure increases with income for both groups.Per capita health expenditure in households with private coverage is four times the expenditure of households with public insurance; this gap is mostly explained by differences in households’ expenditure and demographics. Roughly 80% of the difference in expenditure is explained by the model, showing the role of selection in understanding the expenditure gap between insurance schemes.     

Commercial health insurance: smart or simply lucky?

Changes in the commercial health insurance industry are less a strategic shift than a defensive reaction to forces the industry cannot control and risky opportunities the industry cannot pass up. Diversification into the public sector presents short-term gains for the insurance industry but leaves unchanged the fundamental challenge it faces: rapid and apparently uncontrollable growth in health care costs. Commercial insurers have not proved to be any better than public payers at controlling costs. Unfortunately, unless the drivers of health care cost are tamed, the main benefits that people seek from insurance-stable coverage and financial protection--will erode further.     

Orphan Drug Pricing and Payer Management in the United States: Are We Approaching the Tipping Point?

The Orphan Drug Act of 1983 paved the way for the development of drugs that treat rare diseases, defined in the United States as those affecting fewer than 200,000 patients. Orphan drugs can cost hundreds of thousands of dollars annually, but insurers have traditionally covered these therapies because the small populations involved did not typically lead to significant cost exposure. Payer sensitivity to the cost of orphan drugs is rising, however, with the accelerated rate of new launches of these agents amid intensified economic pressure. Payers are showing increasing levels of concern and scrutiny about coverage of orphan drugs. A new payer survey conducted between February 2008 and March 2009 provides insights on how payers are managing orphan drugs and the way it is likely to evolve in the future. Survey findings show that the patient share of orphan drug costs is rising and is expected to continue to rise, barring sweeping changes in public health policy. This shift in benefit design could affect patient access to orphan agents and, therefore, drug utilization. Manufacturers will have to invest in research to understand payer impact on the uptake of their orphan drugs in development. They will also benefit from being prepared to develop strategies to ensure patient access to and affordability of their orphan agents.For the past 25 years, manufacturers of orphan drugs have faced few obstacles to reimbursement from private or public insurers, despite prices that can amount to hundreds of thousands of dollars annually in treatment cost. However, payer sensitivity appears to be rising, as the launch rate of orphan drugs accelerates amid increasing pressure to contain costs.Patient access to orphan drugs is rarely denied. The diseases that orphan drugs treat are rare and usually have no treatment alternatives. However, orphan drugs are not immune to management tactics and benefitdesign trends that payers apply to other expensive biologics, injectables, or specialty drugs. To varying degrees, major US payers are using the full range of existing tools to ensure appropriate use of orphan agents. Simultaneously, trends in health plan design have increased the burden on patients through cost-sharing. The result is that even when access to or coverage of orphan drugs is offered, providers and patients face hurdles that can affect utilization.In the absence of health policies that dictate otherwise, payers expect the management of orphan drugs to intensify. Manufacturers, providers, and patients can expect the following strategies from insurers that administrate commercial and Medicare health plans:

• Scrutiny of orphan drug utilization up to and exceeding the $50,000 per-patient per-year threshold
• Increased focus on appropriate use of orphan drugs, often restricting use to approved indications
• Rising burden on patients through cost-sharing (ie, coinsurance, higher copayments), as well as existing annual or lifetime maximum payments.

     

Impacts of the Affordable Care Act dependent coverage provision on health-related outcomes of young adults

The first major insurance expansion of the Affordable Care Act – a provision requiring insurers to allow dependents to remain on parents’ health insurance until turning 26 – took effect in September 2010. We estimate this mandate's impacts on numerous outcomes related to health care access, preventive care utilization, risky behaviors, and self-assessed health. We estimate difference-in-differences models with 23–25 year olds as the treatment group and 27–29 year olds as the control group. For the full sample, the dependent coverage provision increased the probabilities of having health insurance, a primary care doctor, and excellent self-assessed health, while reducing body mass index. However, the mandate also increased risky drinking and did not lead to any significant increases in preventive care utilization. Subsample analyses reveal particularly large gains for men and college graduates.     

The role of government in health insurance markets with adverse selection

This paper analyzes the welfare economics of three arrangements for purchasing health insurance: competitive markets in which consumers are free to choose among options with different levels of coverage and prices; systems with compulsory partial pooling which permit private firms to sell supplementary coverage; and government-run pools that purchase comprehensive coverage at a single price for all consumers. Competitive insurance markets are assumed to face the problem of ‘adverse selection’. This refers to a situation in which the insurer cannot observe characteristics of individuals that affect the cost of insurance and that are known to the individuals. Competitive markets with adverse selection are not efficient because low risks cannot purchase comprehensive insurance coverage. However, government-run pools with comprehensive coverage are an inefficient solution to the problem of adverse selection. Compulsory partial coverage may represent an attractive alternative to both competitive markets and comprehensive pools. We discover two situations when government intervention of this type will succeed: when there are not many high risks in the population, and when the risk types are similar. We discuss the implications of these results for health insurance programs in several countries. Our results also have implications for the allocation of public funds for disease-prevention projects. A project targeted at high risks will produce external benefits for low risks, even though they are not directly affected by the program. However, a successful project might eliminate the market for private insurance; in this case the government should consider mandating partial insurance coverage.Copyright © 1998 John Wiley & Sons, Ltd.     

Children with chronic conditions in the 21st century

The care of children who have chronic conditions should focus on improving the lives of the children and their families. This is accomplished most effectively through community-based, family-centered care. Critical issues for these children and families in entering the next century include the level of insurance, content of benefits package, level of evidence required for health insurance reimbursement, preparation of and incentives for health care professionals, roles being demanded of families. As the richest country in the world, we should be able to (1) provide universal coverage, (2) guarantee a comprehensive benefits package that applies a child-specific standard of medical necessity, (3) establish criteria for requiring insurers to reimburse for new effective therapies, (4) develop strategies for overcoming professional barriers, and (5) create mechanisms for compensating family caretakers for their care.     

Are market-oriented health insurance reforms possible in Latin America? The cases of Argentina, Chile and Colombia.

The process of health care reform benefits tremendously from comparing characteristics and performance across nations. This paper studies market-oriented health insurance reforms in three Latin American countries: Argentina, Chile and Colombia. Chile allowed private health insurers to compete for workers payroll contributions in the 1980s, permitting the modernization of the private health sector but relatively impoverishing the public health sector as a consequence of selection practices by private carriers. In the 1990s, Argentina and Colombia started liberalizing the health insurance sector but using policies to avoid the adverse effects encountered in the Chilean experience. These policies are scrutinized while challenges for these and future health insurance reform processes are discussed.     

Access to Health Insurance and Utilization of Substance Use Disorder Treatment: Evidence from the Affordable Care Act Dependent Coverage Provision

The relationship between insurance coverage and use of specialty substance use disorder (SUD) treatment is not well understood. In this study, we add to the literature by examining changes in admissions to SUD treatment following the implementation of a 2010 Affordable Care Act provision requiring health insurers to offer dependent coverage to young adult children of their beneficiaries under age 26. We use national administrative data on admissions to specialty SUD treatment and apply a difference‐in‐differences design to study effects of the expansion on the rate of treatment utilization among young adults and, among those in treatment, changes in insurance status and payment source. We find that admissions to treatment declined by 11% after the expansion. However, the share of young adults covered by private insurance increased by 5.4 percentage points and the share with private insurance as the payment source increased by 3.7 percentage points. This increase was largely offset by decreased payment from government sources. Copyright © 2017 John Wiley & Sons, Ltd.     

Drug coverage in Canada: who is at risk?

Drugs are playing an increasingly important role in health care. However, unlike physician care and hospital care, Canadians do not have universal coverage for drugs. Generally, many employers provide drug coverage as part of employment benefits. In addition, provincial governments provide coverage to some parts of the population, generally, seniors and families on social assistance. Two important recent reports on the state of health care in Canada--the Kirby and Romanow reports--focus on the need for relief to families for rising cost of drugs. Policy makers need good information not only on the likely costs of such a project but also the impact of increasing drug costs on individuals and families with significant drug expenses. One of the keys to assessing scenarios for such relief is knowledge about the extent and depth of existing drug insurance coverage. However, the needed information is scattered over a number of data sources. We have put together a comprehensive and cohesive micro database synthesizing data from these diverse sources. The resultant micro database contains individual/family drug coverage information arrayed by socio-economic characteristics. This paper uses the data set to conduct an extensive analysis of the extent of drug coverage under public and private drug plans in Canada. The paper then goes on to analyze the level of such coverage in terms of out-of-pocket drug expenses faced by Canadian families in an effort to identify gaps in coverage.