Working Paper: NBER ID: w19342
Authors: Pinar Karaca-Mandic; Roger Feldman; Peter Graven
Abstract: Health insurance markets in the United States are characterized by imperfect information, complex products, and substantial search frictions. Insurance agents and brokers play a significant role in helping employers navigate these problems. However, little is known about the relation between the structure of the agent/broker market and access and affordability of insurance. This paper aims to fill this gap by investigating the influence of agents/brokers on health insurance decisions of small firms, which are particularly vulnerable to problems of financing health insurance. Using a unique membership database from the National Association of Health Underwriters together with a nationally representative survey of employers, we find that small firms in more competitive agent/broker markets are more likely to offer health insurance and at lower premiums. Moreover, premiums are less dispersed in more competitive agent/broker markets.
Keywords: health insurance; agents; brokers; small firms; market structure
JEL Codes: I11; I13; L11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| broker competition (G24) | health insurance offerings (G52) |
| broker competition (G24) | health insurance premiums (G52) |
| broker competition (G24) | premium dispersion (Y60) |