Health Affairs

Health Affairs, 25, no. 3 (2006): 759-765 doi: 10.1377/hlthaff.25.3.759 © 2006 by Project HOPE	New Online   Getting Health Reform Done   After the State of the Union   Incremental Reform   E-Health in Developing World   Most-Read Articles in 2009

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The Relationship Between Health Plan Advertising And Market Incentives: Evidence Of Risk-Selective Behavior

Ateev Mehrotra, Sonya Grier and R. Adams Dudley

Medicare beneficiaries are now facing advertising from an unprecedented number of health plans that are offering prescription drug coverage. Previous Medicare managed care efforts have been undermined by risk selection, the practice of enrolling healthier and therefore less costly patients. In this study we explore how the content of health plan advertising is related to the competitiveness of the health plan market. We find that increased competition is associated with greater use of advertising that targets healthier patients.

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