A Nice Profile of Leemore Dafny & Her Work on Competition in Health Insurance Markets

She […] determine[d] that insurers charge more profitable businesses higher premiums, a relationship strongest in geographic markets with a small number of carriers. Beyond higher costs, scant competition also probably causes “a lack of innovation,” she said. She published her findings in the 2010 paper in the American Economic Review.

In 2012, she co-authored a paper that found increases in local concentration between 1998 and 2006 caused premiums in average local health-insurance markets to rise 7 percentage points.

“Given private health-insurance expenditures of $490 billion in our base year 1998, if this result is generalizable, then the ‘premium on premiums’ by 2007 is on the order of $34 billion per year, or about $200 per person with employer-sponsored health insurance,” the study said.

The full story is here.

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
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