Publications
Publications
  • February 2019
  • Article
  • 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
  • Format:Print
ShareBar

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.

About The Author

Leemore S. Dafny

General Management
More Publications

More from the Author