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Health Serv Res. 2018 Oct;53(5):3750-3769. doi: 10.1111/1475-6773.12868. Epub 2018 May 17.

Adverse Selection into and within the Individual Health Insurance Market in California in 2014.

Author information

1
Mongan Institute Health Policy Center, Massachusetts General Hospital, Boston, MA.
2
Department of Medicine, Harvard Medical School, Boston, MA.
3
Department of Health Care Policy, Harvard Medical School, Boston, MA.
4
The Graduate School of Arts and Sciences, Harvard University, Cambridge, MA.
5
School of Economics, Peking University, Haidian District, Beijing, China.
6
School of Public Health, University of California, Berkeley, Berkeley, CA.
7
Division of Research, Kaiser Permanente Northern California, Oakland, CA.
8
Department of Research and Evaluation, Kaiser Permanente Southern California, Pasadena, CA.
9
Department of Health Policy and Management, Harvard T.H. Chan School of Public Health, Boston, MA.
10
Harvard Kennedy School, Cambridge, MA.
11
National Bureau of Economic Research, Cambridge, MA.

Abstract

OBJECTIVE:

The Affordable Care Act (ACA) introduced reforms to mitigate adverse selection into and within the individual insurance market. We examined the traits and predicted medical spending of enrollees in California post-ACA.

DATA SOURCES:

Survey of 2,103 enrollees in individual market plans, on- and off-exchange, in 2014.

STUDY DESIGN:

We compared actual versus potential participants using data from the 2014 California Health Interview Survey on respondents who were individually insured or uninsured. We predicted annual medical spending for each group using age, sex, self-rated health, body mass index, smoking status, and income.

PRINCIPAL FINDINGS:

Average predicted spending was similar for actual ($3,377, 95 percent CI [$3,280-$3,474]) and potential participants ($3,257 [$3,060-$3,454]); however, some vulnerable subgroups were underrepresented. On- versus off-exchange enrollees differed in sociodemographic and health traits with modest differences in spending ($3,448 [$3,330-$3,565] vs. $3,175 [$3,012-$3,338]).

CONCLUSIONS:

We did not find evidence of selection into the overall insurance pool in 2014; however, differences by exchange status reflect the importance of including off-exchange enrollees in analyses and the pool for risk adjustment. California's post-ACA individual market has been a relative success, highlighting the importance of state policies and outreach efforts to encourage participation in the market.

KEYWORDS:

Health reform; insurance; selection

PMID:
29774534
PMCID:
PMC6153153
[Available on 2019-10-01]
DOI:
10.1111/1475-6773.12868

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