Marika Cabral Wins Arrow Award from IHEA

Thu, May 10, 2018
Marika Cabral Wins Arrow Award from IHEA
Congratulations to Marika Cabral!

Marika Cabral was selected as winner of the Arrow Award. The Arrow Award is awarded annually by the International Health Economics Association for the best paper in health economics. Marika won the award for her paper, “Claim Timing and Ex Post Adverse Selection,” which was published in the Review of Economic Studies last year.

The Arrow Award Committee is proud to acknowledge the author of this innovative and policy-relevant paper which uses detailed U.S. dental claims data from a large multinational manufacturing company to examine the effect of strategic treatment delays – a source of ex postadverse selection – on insurance enrollment and consumer welfare. Reduced-form estimates indicate the importance of strategic treatment delays and structural estimates are used to analyze the effects of this strategic behavior. Approximately 40% of individuals are estimated to strategically delay claims from one year to the next, when they have incentives to do so. The resulting ex postadverse selection is associated with 61% lower insurance enrolment and 15% lower per capita consumer welfare than in an equilibrium with only traditional (ex ante) adverse selection. Reducing the frequency of open enrolment periods could substantially improve welfare and ex post adverse selection is one reason why dental coverage is relatively rare in the U.S., does not cover the largest risks and often limits coverage for pre-existing conditions.

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