Why do Sick Pepole Avoid Private Insurance in Germany?

Healthy, high-income people in Germany choose private health insurance. Sick, low-income people generally choose public insurance through Germany’s sickness funds. It shouldn’t be surprising risk selection between public and private insurance occurs in Germany.  Here’s why: While public premiums [in Germany] are subject to community rating, private premiums are risk rated. Moreover, public premiums are…

Adverse Selection in Germany

In Germany, poor and middle class individuals must use public insurance, but well-off Germans can choose between using public and private insurance. “In Germany, about 90% of the population is publicly insured (Colombo & Tapay, 2004). Buying public insurance is mandatory for dependent employees with a regular employment contract as long as their income does…

The Problem with Genetic Testing

Deciding whether to get tested for genetic diseases is a choice many people will face in the coming years.  By knowing whether or not you are more likely to develop a given disease, you may be able to change your health habits or seek earlier medical treatment.  In addition, genetic testing provides additional knowledge useful…

Genetic Adverse Selection

“…individuals who carry the [Huntington Disease] genetic mutation are up to 5 times as likely as the general population to own long-term care insurance…relatively limited increases in genetic information may threaten the viability of private long-term care insurance.” Oster et al. (2009) “Genetic Adverse Selection: Evidence from Long-Term Care Insurance and Huntington Disease” NBER Working…

Movement Across Health Plans

Why do people change health plans? Of course, the most obvious reasons are moving, changing jobs, or qualifying for Medicare. However, some people change health plans even when they remain in the same job. Why is this? A working paper by Cutler, Lincoln and Zeckhauser (2009) give the following explanations: Adverse selection, the movement of…