Enter at your own risk: HMO participation and enrollment in the Medicare risk market

Jean M Abraham, A. Arora, M. Gaynor, Douglas R Wholey

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

We examine HMO participation and enrollment in the Medicare risk market for the years 1990 to 1995. We develop a profit-maximization model of HMO behavior, which explicitly considers potential linkages between an HMO's production decision in the commercial enrollee market and its participation and production decisions in the Medicare risk market. Our results suggest that the payment rate is a primary determinant of HMO participation, while the price of a supplemental Medicare insurance policy positively affects HMO Medicare enrollment. We also find empirical support for the existence of complementarities in the joint production of an HMO's commercial and Medicare products.

Original languageEnglish (US)
Pages (from-to)385-401
Number of pages17
JournalEconomic Inquiry
Volume38
Issue number3
DOIs
StatePublished - Jul 2000

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