Asymmetric Information in Health Insurance: Evidence from the National Medical Expenditure Survey
Open accessAbstract
Adverse selection is perceived to be a major source of market failure in insurance markets. There is little empirical evidence on the extent of the problem. We estimate a structural model of health insurance and health care choices using data on single individuals from the NMES. A robust prediction of adverse-selection models is that riskier types buy more coverage and, on average, end up using more care. We test for unobservables linking health insurance status and health care consumption. We find no evidence of informational asymmetries.
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Cardon and Hendel (2001) find no evidence of selection based on private information.
“Cardon and Hendel (2001) find no evidence of selection based on private information”
From Health Insurance for “Humans”: Information Frictions, Plan Choice, and Consumer Welfare (2015) · cites this paper as Cardon and Hendel (2001)
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- Authors
- Cardon, J. H., & Hendel, I.
- Affiliations
- Brigham Young University (US)
- ORCID
- Cardon, James H.
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 2001
- Volume
- 32
- Issue
- 3
- Pages
- 408
- ISSN
- 0741-6261 (ISSN-L)
- OpenAlex
- W2044293638
- Cited by
- 411
- References
- 19
- Citations by year
- 2026: 4 · 2025: 7 · 2024: 11 · 2023: 8 · 2022: 11 · 2021: 21 · 2020: 17 · 2019: 17 · 2018: 22 · 2017: 23 · 2016: 15 · 2015: 31 · 2014: 17 · 2013: 25 · 2012: 29
- FWCI
- 18.13
- Type
- journal article
- Language
- en
- Open access
- green
- papers.ssrn.com
- Locations
- The RAND Journal of Economics (publishedVersion)
- PubMed (publishedVersion)
- SSRN Electronic Journal (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Healthcare Policy and Management
- Social Sciences › Economics, Econometrics and Finance › Finance › Healthcare Systems and Reforms
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Insurance and Financial Risk Management
- Keywords
- adverse selection, information asymmetry, health insurance, health care utilization, insurance coverage, market failure, National Medical Expenditure Survey
- MeSH terms
- Data Collection, Health Expenditures, Health Status, Humans, Insurance, Health, Models, Theoretical, United States, Medically Uninsured, Information Management, Health Care Surveys
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
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