Panel 3 — Competition in Insurance

To help you get ready for the panel, here’s a list of questions to think about as you go through the book chapter and the Health Insurance Competition slides. There’s nothing to turn in — just look them over so you’re ready to join in. The questions I put to the panel come from this list.

From the reading

You can find these in the chapter and slides.

  1. What does “competition” mean in health insurance, and how is it different from competition in an ordinary product market?
  2. Why can adverse selection make competition among insurers work badly?
  3. What is risk adjustment, and what problem is it trying to fix?
  4. What is “managed competition,” and what is it trying to accomplish?
  5. What tools do markets like the ACA exchanges use to try to make competition work — standardized plans, subsidies, risk adjustment?

Bigger questions

No single right answer here — these are the ones we’ll talk through together.

  1. Competition usually lowers prices and improves quality. Why might we worry it doesn’t do that on its own in health insurance?
  2. Risk adjustment pays plans more for sicker enrollees. What can still go wrong even when it works as intended?
  3. If insurers compete partly by avoiding sick people rather than by offering better value, how would you tell the two apart from the outside?
  4. Would you rather have many insurers competing, or a few large but heavily regulated ones? What are you trading off?
  5. Do we actually want competition in insurance, or is coverage the kind of thing that works better as a single system?

Your take

Have you ever chosen among health plans, or watched a family member do it? What made the choice easy or hard, and did having more options feel like a good thing? Anything from your own experience is welcome.