Employment-based health insurance and the effectiveness of intrafirm competition between insurance providers


Journal Article

This paper examines the effects of competition between insurers for the patronage of a firm's employees. Since for employment-based health insurance the employee choice of health insurance plans is often limited, the availability of competing plans in the market does not necessarily reflect competition within the firm. We utilize data from the 1987 National Medical Expenditures Survey (NMES) to examine the effect of intrafirm competition in the employment-based health insurance market. Using switching regression models, we explore the process that sets premiums and the process that sets the net premium/medical cost margins. We find that greater choice results in higher margins and lower premiums. We also find significantly negative health maintenance organization choice effects on both premiums and margins.

Full Text

Duke Authors

Cited Authors

  • Bradford, WD; Mobley, LR

Published Date

  • January 1, 2004

Published In

Volume / Issue

  • 70 / 4

Start / End Page

  • 1012 - 1031

International Standard Serial Number (ISSN)

  • 0038-4038

Digital Object Identifier (DOI)

  • 10.2307/4135285

Citation Source

  • Scopus