Risk selection in the Massachusetts State employee health insurance program

UMMS Affiliation

Department of Quantitative Health Sciences

Publication Date


Document Type



Costs and Cost Analysis; Diagnosis-Related Groups; Fee-for-Service Plans; Fees and Charges; Health Benefit Plans, Employee; Health Maintenance Organizations; *Insurance Selection Bias; Massachusetts; Models, Statistical; Risk Adjustment; *State Government; United States


Biostatistics | Epidemiology | Health Services Research


Using the Diagnostic Cost Group (DCG) model developed from a national sample, we examine biased selection among one fee-for-service (FFS) plan, one preferred provider organization, and several health maintenance organizations (HMOs) in Massachusetts. The proportions of enrollees in low-risk groups are higher in the HMO plans and lower in the FFS plan. The average age in the FFS plan is 9 years greater than that in the HMO plans. Actual premiums are not consistent with risk levels among HMO plans, resulting in gains in some HMO plans and losses in others as high as 20% compared to expected expenses as computed by the DCG model.

DOI of Published Version



Health Care Manag Sci. 2001 Dec;4(4):281-7. Link to article on publisher's site

Journal/Book/Conference Title

Health care management science

PubMed ID


Related Resources

Link to Article in PubMed