Kevin Comer successfully defended his dissertation proposal on August 19, 2014. His proposal was entitled “An Agent-Based Modeling Approach to Adverse Selection in the Health Insurance Market” The full abstract follows.
Abstract: What this dissertation will attempt to produce is an analysis, through modeling and simulation, of adverse selection in the individual health insurance market. This will involve producing an agent-based model, representing individuals as agents, interacting and making decisions on what health insurance plans to purchase, or whether to participate in the market, while prices of plans and policy tools are implemented in the model environment. Adverse selection in this market has been investigated through more analytical means, such as game theory and, more recently, microsimulation models. However, these methods do not take into account the adaptive nature of prices in the marketplace, nor the heterogeneous nature and bounded rational behavior of individuals acting based on their perception of their environment. The future of healthcare policy depends on a sustainable marketplace, and the fear of an adverse selection market failure – otherwise known as a “death spiral” – has been discussed by political opponents of recent healthcare legislation. The analysis of the conditions for adverse selection, as well as any tools that may be implemented to stymie this behavior, would be of interest to any politicians and other policy makers interested in the future success of the individual health insurance market.