We study the welfare effects of offering choice over coverage levels-"vertical choice"-in regulated health insurance markets. We emphasize that heterogeneity in efficient coverage level is not sufficient to motivate choice. When premiums cannot reflect individuals' costs, it may not be in consumers' best interest to select their efficient coverage level. We show that vertical choice is efficient only if consumers with higher willingness-to-pay have a higher efficient level of coverage. We investigate this condition empirically and find that as long as a minimum coverage level can be enforced, the welfare gains from vertical choice are either zero or economically small.

中文翻译：

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健康险市场什么时候应该有垂直选择？


我们研究在受监管的健康保险市场中提供覆盖范围选择（“垂直选择”）的福利效应。我们强调有效覆盖水平的异质性不足以激发选择。当保费不能反映个人成本时，选择有效的承保水平可能不符合消费者的最佳利益。我们证明，只有当支付意愿较高的消费者拥有较高的有效覆盖水平时，垂直选择才是有效的。我们对这种情况进行了实证研究，发现只要可以执行最低覆盖水平，垂直选择的福利收益要么为零，要么在经济上很小。