The US Health Insurance Market : Performance and Efficiency Analyses

This chapter presents an overview of the US health insurance market, reviews health insurance research literature, and examines premiums, medical expenses, medical service utilization, and data envelopment analysis (DEA) efficiency measures of health insurers from different perspectives. Results indicate that the Affordable Care Act (ACA), or Obamacare, bent the curve of medical costs. Another finding is that medical expense increase was due to medical service utilization increase instead of service price increase. Among states, we find inconsistency existed in medical service pricing. Efficiency analyses show that Medicaid managed care had the highest efficiency from both the consumer and societal perspectives, which displayed an increasing trend for the whole insurer post-ACA. Additionally, some ACA modifications by the Trump administration seemed to have helped with efficiency improvement. During the COVID-19 pandemic, societal efficiency changes suggested selection bias in delayed care and the following pick-up regarding the cost of medical services