|Title:||Voluntary pooling of genetic risk : a health insurance experiment|
|Authors :||Mimra, Wanda|
|Conference details:||45th Annual Seminar of the European Group of Risk and Insurance Economists (EGRIE), Nuremberg, Germany, 17-19 September 2018|
|License (according to publishing contract) :||Licence according to publishing contract|
|Type of review:||No review|
|Subjects :||Health insurance; Genetic risk; Pooling; Effort|
|Subject (DDC) :||360: Social problems and social insurance |
610: Medicine and health
|Abstract:||Scientific and technological advances increasingly allow for better tailoring of health insurance plans to individual health risk profiles. This development questions the sustainability of health plans that feature strong cross-subsidization across different health risk types and health behaviors. An important observation is that the willingness to cross-subsidize risks in health plans might depend on whether the risk is uncontrollable by individuals, such as genetic risk, or modifiable via health behaviors. This paper provides the results of an experiment on the willingness to pool genetic risk in health insurance. Subjects' overall health risk has an assigned, uncontrollable genetic risk part that differs across individuals as well as a behavioral risk part, which can be reduced by costly effort. Participants can decide between a pooling, community-rated group insurance scheme and an insurance with a fully individually risk-adjusted premium. In the experimental variation, the group insurance scheme either includes behavioral risk or separates it out via individual premium discounts. Although we observe social preferences for pooling, only a low level of actual genetic risk pooling emerges across the experimental conditions. This is due to both large heterogeneity in social preferences for pooling across subjects, and the dynamics of the willingness to pay for group insurance in the different experimental markets. Thus, our results indicate that mandatory pooling might be needed if, under the veil of ignorance, a society nevertheless wishes to pool certain forms of heterogeneous risk exposure, such as genetic risk.|
|Departement:||School of Management and Law|
|Organisational Unit:||Winterthur Institute of Health Economics (WIG)|
|Publication type:||Conference paper|
|Appears in Collections:||Publikationen School of Management and Law|
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