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Wednesday, April 29, 2009
Sadrivaan A and B (The Hilton Istanbul Hotel )
Background:
Health insurance is a kind of market that shows several failures, like externalities and asymmetric information, which justify a strict state regulation over the private activities, including price regulation. However, insurance markets are characterized by a mutualism model, with a common fund used by all customers, without payment in function of the quantity used. It’s differently from other regulated markets, where the enterprises can individually charge more to consumers that used more quantities, which enables price regulation utilizing price index.
This study intends to analyze, concerning the economic theory, the price variation regulation model implemented in Brazilian individual health insurance market, since 2000, by the Regulatory Agency of Health (ANS).
Investigation uses the economic literature to explain theoretically the ANS model. After that, the empirical results of payment variation in the regulated market are compared to Brazilian index numbers.
ANS defines an index that is the maximum price variation that operators can apply in individual health insurance, similar a price cap model. Motivated by the incentive regulation theory, the regulator take a similar market how benchmark. Then, ANS index is the average variation of the collectives health insurances, which define freely payment variations and are a more competitive market. It’s a singular model, because with an ingenious mechanism, ANS defines an index that reflects the cost variation as a whole, enclosing amount and price variations.
How expected, this model resulted in customer variation payments that are higher that consumer price indexes and that are satisfactory near to a general value index, the Gross National Product variation.
To sum up, individual plans in Brazil have a genuine pattern of index criterion which transfers the gains of collective plans competition to individual ones. But as far as it is concerned, improvement in this mechanism can be attempted.
Health insurance is a kind of market that shows several failures, like externalities and asymmetric information, which justify a strict state regulation over the private activities, including price regulation. However, insurance markets are characterized by a mutualism model, with a common fund used by all customers, without payment in function of the quantity used. It’s differently from other regulated markets, where the enterprises can individually charge more to consumers that used more quantities, which enables price regulation utilizing price index.
This study intends to analyze, concerning the economic theory, the price variation regulation model implemented in Brazilian individual health insurance market, since 2000, by the Regulatory Agency of Health (ANS).
Methods:
Investigation uses the economic literature to explain theoretically the ANS model. After that, the empirical results of payment variation in the regulated market are compared to Brazilian index numbers.
Results:
ANS defines an index that is the maximum price variation that operators can apply in individual health insurance, similar a price cap model. Motivated by the incentive regulation theory, the regulator take a similar market how benchmark. Then, ANS index is the average variation of the collectives health insurances, which define freely payment variations and are a more competitive market. It’s a singular model, because with an ingenious mechanism, ANS defines an index that reflects the cost variation as a whole, enclosing amount and price variations.
How expected, this model resulted in customer variation payments that are higher that consumer price indexes and that are satisfactory near to a general value index, the Gross National Product variation.
Conclusions:
To sum up, individual plans in Brazil have a genuine pattern of index criterion which transfers the gains of collective plans competition to individual ones. But as far as it is concerned, improvement in this mechanism can be attempted.
Learning Objectives: 1) Identify international literature of Health insurance regulation; 2) Articulate the price regulation of Brazilian health insurance case with other experiences; 3) Evaluate the policy of health insurance price regulation in Brazil.
Sub-Theme: Financing Global Public Health
See more of: Poster: Financing Global Public Health
See more of: Public Health Research & Policy Development
See more of: Public Health Research & Policy Development