Community rating and sustainable individual health insurance markets in New Jersey

Health Affairs

Volumn 23, Issue 4, 2004, Pages 167-175

  Monheit, Alan C ^a   Cantor, Joel C ^b   Koller, Margaret ^c   Fox, Kimberley S ^c  

^a UNIVERSITY OF MEDICINE AND DENTISTRY OF NEW JERSEY   (United States)

^b RUTGERS UNIVERSITY   (United States)

^c NONE

Author keywords

[No Author keywords available]

Indexed keywords

AGING; HEALTH CARE COST; HEALTH CARE PERSONNEL; HEALTH CARE POLICY; HEALTH INSURANCE; HOSPITAL CARE; HUMAN; MEDICARE; NURSING; PRESCRIPTION; PUBLIC HEALTH; RATING SCALE; REVIEW;

DATA COLLECTION; HEALTH CARE SECTOR; INSURANCE COVERAGE; INSURANCE, HEALTH; NEW JERSEY; STATE GOVERNMENT;

EID: 3242663580     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.23.4.167     Document Type: Review

References (30)

1. For a discussion of circumstances leading to the IHCP's formation, see K. Swartz and D. Garnick, "Lessons from New Jersey," Journal of Health Politics, Policy and Law 25, no. 1 (2000): 45-70.
2. The loss assessment system served to reduce the costs to carriers seeking to enter the market and to provide subsidies to sustain a market with potential adverse selection. See ibid.; and K. Swartz and D. Garnick, "Regulating Markets: Lessons from New Jersey's Individual Health Insurance Coverage Program" (Unpublished manuscript, Harvard University, October 1998).
3. Swartz and Garnick, "Lessons from New Jersey"; and K. Swartz and D. Garnick, "Can Adverse Selection Be Avoided in a Market for Individual Insurance?" Medical Care Research and Review 56, no. 3 (1999): 373-388.
4. Swartz and Garnick, "Lessons from New Jersey"; and K. Swartz and D. Garnick, "Can Adverse Selection Be Avoided in a Market for Individual Insurance?" Medical Care Research and Review 56, no. 3 (1999): 373-388.
5. M. Rothschild and J. Stiglitz, "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," Quarterly Journal of Economics 90, no. 4 (1976): 630-649; and T. Buchmueller and J. DiNardo, "Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut," American Economic Review 92, no. 1 (2002): 280-293.
6. M. Rothschild and J. Stiglitz, "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," Quarterly Journal of Economics 90, no. 4 (1976): 630-649; and T. Buchmueller and J. DiNardo, "Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut," American Economic Review 92, no. 1 (2002): 280-293.
7. For the most recent IHCP plan characteristics and monthly premiums, see "New Jersey Individual Health Coverage Program Rates," 4 March 2004, www.nj.gov/dobi/ihcrates.htm (13 April 2004).
8. Carriers' market share changed over time, so the composite premium will include different carriers.
9. We expect that network and referral restrictions would lead most enrollees to consider HMOs to be less generous than indemnity plans. See Buchmueller and DiNardo, "Did Community Rating Induce an Adverse Selection Death Spiral?"; and R. Feldman and B. Dowd, "Risk Segmentation: Goal or Problem?" Journal of Health Economics 19, no. 4 (2000): 499-512.
10. We expect that network and referral restrictions would lead most enrollees to consider HMOs to be less generous than indemnity plans. See Buchmueller and DiNardo, "Did Community Rating Induce an Adverse Selection Death Spiral?"; and R. Feldman and B. Dowd, "Risk Segmentation: Goal or Problem?" Journal of Health Economics 19, no. 4 (2000): 499-512.
11. The discussion follows Swartz and Garnick, "Lessons from New Jersey"; Swartz and Garnick, "Regulating Markets"; and K. Swartz and D. Garnick, "Unintended but Predictable Outcomes of Regulations: The Case of New Jersey's Individual Health Care Program" (Unpublished manuscript, Harvard University, 12 January 1998).
12. The discussion follows Swartz and Garnick, "Lessons from New Jersey"; Swartz and Garnick, "Regulating Markets"; and K. Swartz and D. Garnick, "Unintended but Predictable Outcomes of Regulations: The Case of New Jersey's Individual Health Care Program" (Unpublished manuscript, Harvard University, 12 January 1998).
13. The discussion follows Swartz and Garnick, "Lessons from New Jersey"; Swartz and Garnick, "Regulating Markets"; and K. Swartz and D. Garnick, "Unintended but Predictable Outcomes of Regulations: The Case of New Jersey's Individual Health Care Program" (Unpublished manuscript, Harvard University, 12 January 1998).
14. Swartz and Garnick, "Lessons from New Jersey"; and Swartz and Garnick, "Regulating Markets." The small carriers were Manhattan National Life Insurance, Metropolitan Life Insurance, National Casualty, Protective Life Insurance, Time Insurance, TMG Life Insurance, Travelers Insurance, and Washington National Insurance.
15. Swartz and Garnick, "Lessons from New Jersey"; and Swartz and Garnick, "Regulating Markets." The small carriers were Manhattan National Life Insurance, Metropolitan Life Insurance, National Casualty, Protective Life Insurance, Time Insurance, TMG Life Insurance, Travelers Insurance, and Washington National Insurance.
16. Based on discussions with representatives from the New Jersey Department of Banking and Insurance, Fall 2003.
17. New Jersey Department of Labor, "New Jersey Economic Indicators: Historical Data Series, 1976-2001, Resident Employment, Series 2," www.wnjpin.net/OneStopCareerCenter/Labor MarketInformation/lmi07/series2.htm (13 April 2004).
18. Data are from P. Fronstin, Sources of Health Insurance and Characteristics of the Uninsured: An Analysis of the March 2001 Current Population Survey, EBRI Issue Brief no. 240 (Washington: Employee Benefit Research Institute, December 2001). Following Fronstin, we have adjusted the estimates to reflect the inclusion of an insurance status verification question in the CPS in 1998.
19. See New Jersey Small Employer Health Benefits Program Board, "The Effects on the Individual and Small Employer Health Coverage Markets of Permitting Individuals to Purchase Small Employer Health Benefits Plan: A Report to the New Jersey Legislature" (Unpublished report, 25 September 1996), for a comparison of monthly premiums for a small employer group insured through specific IHCP and SEHBP plans.
20. Swartz and Garnick, "Regulating Markets."
21. S. Silow-Carroll et al., Assessing State Strategies for Health Coverage Expansions: Case Studies of Oregon, Rhode Island, New Jersey, and Georgia (New York: Commonwealth Fund, November 2002).
22. Swartz and Garnick, "Lessons from New Jersey."
23. Fronstin, Sources of Health Insurance.
24. Data are from Henry J. Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits: 2002 Annual Survey (Washington: Kaiser Family Foundation, September 2002).
25. T. McBride et al., "The Dynamics of Individual Insurance Coverage in the U.S." (Paper presented at the Twentieth Annual Research Meeting of AcademyHealth, Nashville, Tennessee, 27-29 June 2003). Median spell length for people with individual coverage is five months. On average, older people, especially those nearing retirement, remain in the market longer than younger people.
26. See M. Hall, "An Evaluation of New York's Reform Law," Journal of Health Politics, Policy and Law 24 no. 1 (2000): 71-100; K. Thorpe, "Who Purchases Individual Insurance? A Comparision of New York State, Regional, and National Patterns, 1994-1997" (Unpublished manuscript, Tulane University Medical Center, March 1999); and D. Chollet, "Changes in the Individual Insurance Market" (Paper presented at the Annual Research Meeting of AcademyHealth, Washington D.C., 23 June 2002).
27. See M. Hall, "An Evaluation of New York's Reform Law," Journal of Health Politics, Policy and Law 24 no. 1 (2000): 71-100; K. Thorpe, "Who Purchases Individual Insurance? A Comparision of New York State, Regional, and National Patterns, 1994-1997" (Unpublished manuscript, Tulane University Medical Center, March 1999); and D. Chollet, "Changes in the Individual Insurance Market" (Paper presented at the Annual Research Meeting of AcademyHealth, Washington D.C., 23 June 2002).
28. See M. Hall, "An Evaluation of New York's Reform Law," Journal of Health Politics, Policy and Law 24 no. 1 (2000): 71-100; K. Thorpe, "Who Purchases Individual Insurance? A Comparision of New York State, Regional, and National Patterns, 1994-1997" (Unpublished manuscript, Tulane University Medical Center, March 1999); and D. Chollet, "Changes in the Individual Insurance Market" (Paper presented at the Annual Research Meeting of AcademyHealth, Washington D.C., 23 June 2002).
29. M.S. Marquis and S.H. Long, "Worker Demand for Health Insurance in the Non-Group Market," Journal of Health Economics 14, no. 1 (1994): 47-63.
30. See New Jersey SEHBP Board, "The Effects on the Individual and Small Employer Health Coverage Markets." Figures in the text are the authors' computations; details are available on request by e-mailing Alan Monheit, monheiac@ umdnj.edu.