The Impact of Access Regulation on Health Insurance Market Structure. Research Design and Methods


Without exception, the empirical research literature investigating the structure of health insurance markets has investigated only the HMO market (Paul and Chollet, 1997). In part because this literature fails to consider the other sectors of the market, and in part because it fails to consider the types of regulation of interest in this paper, it offers no real precedent for this study.

In the next several sections, we propose several models of insurer behavior in regulated markets. In general, these models are consistent with conventional competitive models of supply and also a growing recent literature that links more restrictive state regulation in the small-group market to declines in coverage in that market.4 Finally, we extend the logic of the small-group insurer responses to the individual market, estimating essentially the same models for the individual market. We estimate both sets of models by state and by year, using fixed-effects multiple regression analysis.