The Effect of Rate Regulation on Access to Supplemental Health Insurance
- Presenter:
Chair: Katherine McDonald; Discussant: Kate Bundorf Wed June 7, 2006 8:00-9:30 Room 326
In this paper, we examine the implementation of rating restrictions in the market for privately purchased health insurance supplementing nearly universal, publicly financed Medicare coverage for the elderly in the U.S. Although Medicare is a federal program, private health insurance markets are generally regulated by the states, and during the 1990s, a subset of states adopted different types of rate regulation in this market. We exploit variation in the timing and design of these policies to identify the effects of rate regulation on access to supplemental health insurance. Our analysis is based on data from the 1992-1999 Medicare Current Beneficiary Survey (MCBS). We find that the strongest versions of these laws reduced access to supplemental coverage among low risks and increased access among high risks. We also find evidence of substitution among low risks toward managed care. The results suggest that rate regulation in this market had significant effects on coverage among the elderly.
