[dalke]

You missed that this was describing research which shows adverse selection is a "at least partly" behind the problem. Without research, you're just hand-waving that it might be a problem, but you don't know if it's actually a significant influence.

Quoting from the article: Hendren didn’t invent the idea of markets falling apart because customers know something that companies don’t. Nobel prizes were awarded to a trio of economists in 2001 for developing this idea of adverse selection in the 1970s. But his use of the concept may at least partly resolve the puzzle of why those with pre-existing conditions can’t get insurance.

Another quote: This individual mandate is a natural fix to the problem of adverse selection in health insurance: It keeps the lowest-cost participants from opting out, and as a result the market doesn’t unravel.

[tptacek]

I think we're talking past each other. To make my review pithier: this is an article that could largely have been written from the Wikipedia article on "adverse selection".

[dalke]

The Wikipedia article says "Whilst adverse selection in theory seems an obvious and inevitable consequence of economic incentives, empirical evidence is mixed." This paper gives more concrete empirical evidence.

The WP article later says: "On the other hand, "positive" test results for adverse selection have been reported in health insurance,[8] long-term care insurance[9] and annuity markets.[10]". The reference #9 is Finkelstein, A.; McGarry, K. (2006). "Multiple dimensions of private information: evidence from the long-term care insurance market". American Economic Review 96 (4): 938–958.

Then if you go to the actual paper by Nathaniel Hendren, linked to by the Slate article, you'll read:

"""Previous research has found minimal or no evidence of private information using the revealed preference approach in these settings. In life insurance, Cawley and Philipson [1999] find no evidence of adverse selection. He [2009] revisits this with a different sample focusing on new purchasers and does find evidence of small amounts of adverse selection. In long-term care, Finkelstein and McGarry [2006] find direct evidence of private information by showing subjective probabilities are correlated with subsequent nursing home use. However, they find no evidence that this private information leads to adverse selection in the form of a correlation between insurance purchase and subsequent losses in the LTC insurance market.35 To our knowledge, there is no previous study of private information in the non-group disability market."""

In other words, WP's "'positive' test results" isn't as strongly positive as you might think from that short WP summary. The finding from this paper is the development of a more useful model of the problem which can make more concrete statements like: "For those who would be rejected, private information imposes a barrier to trade equivalent to an implicit tax on insurance premiums of roughly 65-75% in long-term care, 90-130% in disability, and 65-130% in life insurance."

That could not have been done using the information in the Wikipedia article.

You complained about two things: that there are no new findings, and that the Slate article could have been writing from the Wikipedia article. I think I've shown that there are definite new findings in the actual report. It was interesting enough, after all, to get the researcher "offers from economics departments at Harvard, Stanford, and Princeton."

As to the quality of the Slate article - the entire first half is meant for someone who has never heard of "adverse selection", and it explains the topic much better than the WP article does. It then covers some of the research methodology, and describes the policy impact and ties to changes in US insurance law and politics. None of the last half is covered in the Wikipedia article.