Solutions for adverse selection in behavioral health care.
Frank, Richard G
Date of Pub
Bae, Jay P; McGuire, Thomas G; Rupp, Agnes
Health plans have incentives to discourage high-cost enrollees (such as persons with mental illness) from joining. Public
policy to counter incentives created by adverse selection is difficult when managed care controls cost through methods that
are largely beyond the grasp of direct regulation. In this article, the authors evaluate three approaches to dealing with
selection incentives: risk adjustment, the carving out of benefits, and cost- or risk-sharing between the payer and the plan.
Adverse selection is a serious problem in the context of managed care. Risk adjustment is not likely to help much, but carving
out the benefit and cost-sharing are promising directions for policy.
Insurance Selection Bias : Insurance, Psychiatric : Economic Competition : Health Policy : Human : Managed Care Programs/economics/utilization
: Mental Disorders : Mental Health Services/economics/utilization : Risk : Support, U.S. Gov't, P.H.S. : United States