The Role of Agents and Brokers in the Market for Health Insurance. Issue 1 (6th December 2016)

• Record Type: Journal Article
• Authors: Karaca‐Mandic, Pinar; Feldman, Roger; Graven, Peter
• Is Part Of: Journal of risk and insurance. Volume 85:Issue 1(2018)
• Page Start: 7
• Page End: 34
• Publication Date: 2016-12-06
• Subjects: Insurance -- United States -- Periodicals; 368.97305
• DOI: 10.1111/jori.12139
• Languages: English
• ISSNs: 0022-4367

Abstract

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 relations between the structure of the agent/broker market and access and affordability of insurance. This article aims to fill this gap by investigating the influence of agents/brokers on health insurance offering 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.