Abstract
The 2010 Affordable Care Act (ACA) instituted incumbent regulation policies in the small group market, where existing health plans could choose to defer compliance with ACA regulations. This created incentives for employers with lower expected healthcare costs and greater uncertainty to not immediately become ACA compliant. We use unique national data with over 300,000 employer-years from 2013 to 2017. Consistent with these incentives, we find that employers with healthier enrollees and those with more turnover were more likely to not immediately comply. This created adverse selection in the ACA-compliant market, increasing its annual healthcare costs by $365 per individual in 2014.
Original language | English (US) |
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Article number | 104556 |
Journal | Journal of Public Economics |
Volume | 205 |
DOIs | |
State | Published - Jan 2022 |
Keywords
- Community rating
- Health insurance
- Small group market
ASJC Scopus subject areas
- Finance
- Economics and Econometrics