Exploration of market-based risk adjustments for health insurance

The Foundation's Changes in Health Care Financing and Organization program was designed to support research, demonstration, and evaluation projects examining major changes in health care financing.The purpose of this project is to explore alternative risk adjustment mechanisms to compensate health plans that incur adverse risk selection. The project will look at how other markets with asymmetric information and unequal risk levels spread the risk among suppliers. The objective of this research is to understand how other markets distribute risk in order to provide lessons for how the risks of health insurance might more fairly and efficiently be spread among plans. To determine how these other market mechanisms spread risk, the researchers will read the literature about each market and will interview people who have been involved in creating financial instruments, who trade on the futures market, or who have implemented pseudo-markets. The goal of this research will be to determine how feasible it might be for the government to encourage or implement a market driven method of determining risk for health insurance.

Grant Details

Amount Awarded $29,818.00

Awarded on: 10/14/1994

Time frame: 11/1/1994 - 7/31/1995

Grant Number: 26052


Harvard University T. H. Chan School of Public Health

677 Huntington Avenue
Boston, 02115-6028


Katherine Swartz
Project Director