Modeling Health Insurance Markets

Models projecting the impact of changes to health insurance markets play an important role in US policymaking. Proposed regulatory and legislative changes to the Affordable Care Act (ACA), as well as a recent surge in state-level reform initiatives (e.g., the expansion of risk-rated insurance in some states and state-sponsored single payer bills in others), have the potential to dramatically remake US insurance markets—not only in terms of the prices and choices consumers face, but also in terms of the providers they can see. In this paper, we summarize current knowledge and methods for modeling eligibility, takeup, plan design, and costs in health insurance markets. We identify pressing policy issues that can be assessed using modeling/microsimulation, and discuss gaps in data, research and methods that will need to be addressed to adequately model reform proposals currently under consideration.