Publications by authors named "Michel Oskam"
Objectives: The goals of this paper are: (1) to identify groups of healthy people; and (2) to quantify the extent to which the Dutch risk adjustment (RA) model overpays insurers for these groups.
Background: There have been strong signals that insurers in the Dutch regulated health insurance market engage in actions to attract healthy people. A potential explanation for this behavior is that the Dutch RA model overpays insurers for healthy people.
Article Synopsis
- Many health insurance markets use risk equalization to balance out profits and losses among insurers, targeting risk selection where healthier individuals are favored over those with chronic conditions.
- The paper argues that even with effective risk equalization, insurers may still have incentives to select healthier individuals due to varying levels of uncertainty in their spending.
- To address these selection incentives, it suggests that additional policy measures may be necessary to ensure fair treatment, particularly in how insurers deal with the unpredictable costs associated with different health groups.
Health insurance markets with community-rated premiums typically use risk equalization (RE) to compensate insurers for predictable profits on people in good health and predictable losses on those with a chronic disease. Over the past decades RE models have evolved from simple demographic models to sophisticated health-based models. Despite the improvements, however, non-trivial predictable profits and losses remain.
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