Publications
Publications
- February 2019
- American Economic Journal: Economic Policy
Does It Matter If Your Health Insurer Is For Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending
By: Leemore S. Dafny
Abstract
There is limited empirical evidence about the impact of for-profit health insurers on various outcomes. I study the effects of conversions to for-profit status by Blue Cross Blue Shield (BCBS) affiliates in 11 states, spanning 28 geographic markets. I find both the BCBS affiliate and its rivals increased premiums following conversions in markets where the converting affiliate had substantial market share. Medicaid enrollment rates also increased in these markets, a pattern consistent with "crowd in" of families who were formerly privately insured. The results suggest for-profit insurers are likelier than not-for-profit insurers to exercise market power when they possess it.
Keywords
Health Insurance; Medical Loss Ratio; Blue Cross; Corporate Governance; Health; Insurance; For-Profit Firms; Insurance Industry; United States
Citation
Dafny, Leemore S. "Does It Matter If Your Health Insurer Is For Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending." American Economic Journal: Economic Policy 11, no. 1 (February 2019): 222–265.
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