AN AGENT-BASED COMPUTATIONAL MODEL OF THE INDIVIDUAL HEALTH INSURANCE MARKET

This paper focuses on constructing an abstract baseline model of agents, simulating buyers and sellers of health insurance, in the individual health insurance market. Each buyer assesses their expected medical expenses, surveys the insurance contracts available on the market, and decides each year whether to buy insurance, and which plan they will choose. Each seller, upon seeing the costs to provide medical care to its subscriber base, will update the premium price it offers to the market to remain profitable. The aim of this paper is two-fold – to produce a self-sustaining representation of the insurance market that qualitatively represents the health insurance market without any external policy implementations and to quantitatively replicate the large-scale metrics seen in the insurance market, most notably the price elasticity of demand for insurance.