The A.I. Dilemma: Growth versus Existential Risk [pdf]

Nov 20, 2023 ·

The article, written by Robert L. Ohsfeldt and John E. Schneider of the National Bureau of Economic Research (NBER), examines the changing nature of health insurance in the United States over the course of the last three decades. The authors first provide an overview of the current state of the health insurance market: employer-provided insurance is declining, while enrollment in public programs has increased substantially and is expected to continue to increase in the near future. They then present results from a series of regression analyses that show that the market concentration for employer-provided plans increased in two-thirds of states between 1988 and 2016. The authors find evidence that these increases in market concentration lead to higher premiums and deductibles, lower physician visits, and greater unmet need due to cost.

Next, the authors examine trends in self-insurance rates among employers. They find that these rates have been increasing since the mid-1990s, driven largely by large employers. Self-insured plans often lack regulations similar to those that apply to fully insured plans, and can provide coverage not available in the commercial market, including mental health services and some prescription drugs.

The authors then focus on how regulation affects premiums and insurer profits. They find that certain aspects of regulation, such as mandated benefits, have little effect on premiums and can reduce insurer profits, but that other regulations, such as rate regulation, can significantly reduce premiums. This suggests that there may be some potential for regulatory intervention in the insurance market.

Finally, the authors discuss the implications of their findings for policy. They suggest that policy makers should consider the effects of market structure, regulation, and self-insurance when shaping policy. They also argue that policy makers should be aware of the potential tradeoffs between increasing access to care and increased insurer profitability. In conclusion, the authors suggest that a careful examination of the changing structure of the insurance industry is needed in order to inform policy decisions.