We evaluate, in terms of efficiency and selection incentives, four different ex post risk sharing mechanisms. Outlier risk sharing (ORS), proportional risk sharing (PRS), risk sharing for high costs (RSHC) and risk sharing for high risks. Our results suggest that the best mechanism in terms of...

Risk adjustment is vital in health policy design. Risk adjustment defines the annual capitation payments to health insurers and is a key determinant of insolvency risk for health insurers. In this study we compare the current risk adjustment formula used by Colombia's Ministry of Health and...

We introduce new risk groups to a standard capitation formula and evaluate risk selection incentives of insurers. The study uses a unique data set of almost 24 million affiliates to Government's mandatory health insurance system. This data set is very rich in the sense of reporting all claims...

This paper studies the design of health insurance with ex post moral hazard, when there is imperfect competition in the market for the medical product. Various scenarios, such as monopoly pricing, price negotiation or horizontal differentiation are considered. The insurance contract specifies...

We estimate the health costs of supply-side barriers to accessing medical care. The setting is Colombia, where citizens have a constitutional right to health care, but insurance companies that manage delivery impose restrictions on access. We use administrative data on judicial claims for health...

We examine whether the Colombian government, when instituting and expanding social programs in the early nineties, inadvertently created incentives for people to become informal. We use data from repeated cross-sections of the Colombian Household Survey for periods before and after...

This paper examines a model of competition between two types of health insurers: Managed Care Organizations (MCOs) and “Conventional Insurers." MCOs vertically integrate health care providers and pay them at a competitive price, while conventional insurers work as indemnity plans and pay the...

We compare two genetic testing regulations, Disclosure Duty (DD) and Consent Law (CL), in an environment where individuals choose to take a genetic test or not. DD forces agents to reveal the test results to their insurers, resulting in a discrimination risk. CL allows agents to withhold that...

Personalized medicine is still in its infancy, with costly genetic tests providing Little actionable information in terms of efficient prevention decisions. As a consequence, few people undertake these tests currently, and health insurance contracts pool all agents irrespective of their genetic...

Countries that seek to provide universal health coverage deal with considerable publicly funded expenses. This article discusses if a private health insurance subsidy policy can reduce the expenses covered by the public system. A theoretical model is developed in which individuals are...