Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Regulated Competition in Health Insurance Markets on Two Sides of the Atlantic
Journal of Economic Perspectives
(pp. 43–68)
(Complimentary)
Abstract
Many high-income countries implement their policy of universal health insurance by individual health insurance in combination with regulated competition among insurers. Supported by public intervention, regulated competition can, in principle, address market failures in health insurance and smooth out some inequities in the financial consequences of ill health and in the ability to pay for health insurance. We compare the national systems in Germany, the Netherlands, and Switzerland to the US Marketplaces, all of which use versions of regulated competition. While they show many similarities (for example, open enrollment, community-rated premiums with subsidies, comprehensive benefit package, risk adjustment), we focus on three major differences and their implications for market functioning: (1) mandatory and universal versus voluntary and partial (applying to only one sector of health insurance); (2) greater or lesser profit orientation of insurers; and (3) reliance on markets or regulation to contain costs.Citation
Kauer, Lukas, Thomas G. McGuire, Sonja Schillo, and Richard C. van Kleef. 2026. "Regulated Competition in Health Insurance Markets on Two Sides of the Atlantic." Journal of Economic Perspectives 40 (2): 43–68. DOI: 10.1257/jep.20251474Additional Materials
JEL Classification
- G22 Insurance; Insurance Companies; Actuarial Studies
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- I12 Health Behavior
- I13 Health Insurance, Public and Private
- I14 Health and Inequality
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs