A risk adjustment scheme (RAS) within social health insurance is designed to prevent insurers from engaging in risk selection. This paper shows that with cost differences between insurance plans as they exist between managed-care and traditional insurance, current RASs create incentives for...

Asymmetric information can lead to adverse selection and market failure. In a dynamic setting, asymmetric information also limits reclassification risk. This certainty offsets the costs of adverse selection. Using a dynamic model of endogenous insurance choice and price calibrated to the U.S....

This chapter will deal with the actual and efficient functioning of health insurance in settings where risk (expected value) of medical spending or insurance benefits varies across individuals at a given point in time or over time for a given individual. It will deal with equilibrium in...

In a market where insurers are not allowed to risk rate, we find evidence of advantageous selection using observed health expenditure risk. Selection is driven by income and optimism about the future. This may explain insurers’ profitability, despite community rating.

SHARE, the "Survey of Health, Ageing and Retirement in Europe", is a large population-based panel survey among people aged 50 and over with data from 28 European countries and Israel. It investigates individual, economic, health-related, and social life-course circumstances in order to shed...