Individual health insurance reforms in the US: Expanding interstate markets, Medicare for all, or Medicaid for all?

To help enhancing affordability and availability in the U.S. individual health insurance markets, we eval-uate whether expanding interstate markets is associated with efficiency improvement, and the potentials of Medicaid for All and Medicare for All. This research aims to provide insights and evidence for data-driven decision making in reforming individual health insurance markets and optimizing individual health insurance operations. We employ traditional, non-oriented slack-based, order-alpha partial frontier, bootstrapped bias-corrected, and modified context-dependent data envelopment analysis (DEA) models, as well as generalized linear, Tobit, and residual inclusion regression models. We find that higher com-petition or expansion is not associated with higher consumer efficiency or societal efficiency. Our results also indicate that, in minimizing premiums or expenses given enrollment and utilization of medical ser-vices, individual health plans are less efficient than Medicaid managed care plans, but more efficient than Medicare Advantage plans. Our findings imply that, for individual plans, expanding interstate markets is not accompanied with lower premiums or expenses without the sacrifice of medical services. This re-search suggests that it should be advisable to structure individual health insurance markets following the Medicaid managed care model but not the Medicare Advantage model. To Medicaid-ize individual mar -kets, we propose to structure the individual coverage in two layers: a conditionally subsidized Medicaid managed care program with mandatory essential benefits, and an unsubsidized Medicaid Supplement program for optional additional coverages. (C) 2021 Elsevier B.V. All rights reserved.

Automated summary

The research found that expanding interstate markets is not associated with efficiency improvement in individual health insurance markets. When minimizing premiums or expenses given enrollment and utilization of medical services, individual health plans are less efficient than Medicaid managed care plans, but more efficient than Medicare Advantage plans. Therefore, it is suggested to structure individual health insurance markets following the Medicaid managed care model.