Premium variation in the individual health insurance market

Bradley Herring, Mark V. Pauly

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


Recent proposals to decrease the number of uninsured in the U.S. indicate that the individual health insurance market's role may increase. Amid fears of possible risk-segmentation in individual insurance, there exists limited information of the functioning of such markets. This paper examines the relationship between expected medical expense and actual paid premiums for households with individual insurance in the 1996-1997 Community Tracking Study's Household Survey. We find that premiums vary less than proportionately with expected expense and vary only with certain risk characteristics. We also explore how the relationship between risk and premiums is affected by local regulations and market characteristics. We find that premiums vary significantly less strongly with risk for persons insured by HMOs and in markets dominated by managed care insurers.

Original languageEnglish (US)
Pages (from-to)43-58
Number of pages16
JournalInternational journal of health care finance and economics
Issue number1
StatePublished - Mar 2001
Externally publishedYes

ASJC Scopus subject areas

  • Health(social science)
  • Finance
  • Economics, Econometrics and Finance(all)


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