Pooling Health Insurance Risks

This is a sharp, eye-opening analysis of what really drives health insurance premiums, in which leading health economist Mark Pauly untangles risk pooling, indicators of risk, private insurance markets, and public subsidies, asking whether the healthy subsidize the unhealthy and how costs should vary with risk and economic status, giving policymakers, students, and curious consumers a clear-eyed look at how coverage is priced.

How are the costs of health insurance premiums determined? Should costs vary according to indicators of risk? How much do premiums vary with risk? Do the healthy subsidize the unhealthy? Should public subsidies vary according to economic status and risk? This book examines these questions.

Mark V. Pauly holds the position of Bendheim Professor in the Department of Health Care Systems at the Wharton School of the University of Pennsylvania.

Bradley Herring is a senior economist with the President's Council of Economic Advisers. He is currently on leave from Emory University, and will be joining the faculty of the Bloomberg School of Public Health at Johns Hopkins University in autumn 2007. Herring's research focuses on a number of economic and public policy issues related to private and public health insurance. He has published articles in the Journal of Health Economics and Health Affairs and is coauthor of the book Pooling Health Insurance Risks (AEI Press, 1999). He has received funding from the Department of Health and Human Services to examine the individual health insurance market and from the Robert Wood Johnson Foundation to examine Medicaid managed care.