Given the lack of data about reinsurance arrangements in two of the markets (i.e., indemnity and self-funded employer markets) and some of the limits on data availability in the HMO reinsurance market, the question becomes what options are available to researchers and policymakers for developing better data about the role of reinsurance in the three markets. In this section, we discuss how additional information could be obtained through existing data sources. We do not address all of the issues associated with developing a new set of surveys of insurers or employers to gather this information because the costs of creating a separate survey for this type of information appear large in relation to the potential benefit.
In considering the options for collecting reinsurance information discussed below, several criteria are important:
- Reliability. Can the type of information that is being sought be reliably collected from the data source. Reinsurance transactions can be complex, and it is important that the person providing the information have sufficient familiarity with the reinsurance transactions of the surveyed entity to be able to address detailed questions related to thresholds, retentions and unit of risk. For example, individuals at BLS told us that they had ceased collecting information on minimum premium plans because the individuals that they collected information from at employer establishments were not familiar with these arrangements.
- Cost. A second important consideration is whether seeking additional information about reinsurance as part of existing data collection efforts would substantially increase the costs of those efforts. Costs could be increased in several ways, such as lengthening interview times and increasing data cleaning and processing costs.
- Response burden. A third important consideration is the effect that seeking additional information on reinsurance would have on the burden of respondents, both in terms of time and costs. Increasing response burden can discourage participation in data collection efforts and lower response rates. It also imposes financial costs on respondents.
- Purpose of the existing data collection effort. A fourth consideration is whether attempting to gather additional data on reinsurance is consistent with the purpose of the existing data collection activity. Attempting to gather descriptive information through a data collection effort that has another primary purpose (e.g., as a regulatory tool) may be objectionable to the regulated industry and to the regulators (unless the information furthers some regulatory purpose).