Cutler, David M, and Richard Zeckhauser. 1998. “Adverse Selection in Health Insurance.” Frontiers in Health Policy Research, Volume 1, edited by Alan Garber, 1-31. Cambridge: Mit Press. Website
Cutler, David M. 1997. “Public Policy for Health Care.” Fiscal Policy: Lessons from Economic Research, edited by Alan Auerbach, 159-198. Cambridge: MIT Press. Website
Cutler, David M. 1997. “Medical Care Reform for an Aging Society.” Facing the Age Wave, edited by David Wise, 88-114. Stanford: Hoover Institution Press. Website
Cutler, David M, and Jonathan Gruber. 1997. “Medicaid and Private Insurance: Evidence and Implications.” Health Affairs 16 (1): 194-200. Website
Cutler, David M, and Elizabeth Richardson. 1997. “Measuring the Health of the U.S. Population.” Brookings Papers on Economic Activity Microeconomics: 217-272 . Website
Cutler, David M, and Edward L Glaeser. 1997. “Are Ghettos Good or Bad?” Quarterly Journal of Economics 112 (3): 827-872 . Website
Cutler, David M, and Jonathan Gruber. 1996. “Does Public Insurance Crowd Out Private Insurance?” Quarterly Journal of Economics 111 (2): 391-430 . Website
Cutler, David M, and Jonathan Gruber. 1996. “The Effect of Medicaid Expansions on Public Insurance, Private Insurance, and Redistribution.” American Economic Review 86 (2): 378-383. Website
Cutler, David M, and Jonathan Gruber. 1996. “Restructuring Medicare for the Future.” Setting National Priorities, edited by Robert Reischauer, 197-234. Washington, D.C. The Brookings Institution. Website
Cutler, David M. 1996. “Re-Examining the Three-Legged Stool of Retirement Income Support.” Social Security: What Role for the Future?, edited by Peter Diamond, David Lindeman, and Howard Young, 125-149. Washington, D.C. National Academy of Social Insurance. Website

This paper examines the apparent failure of private markets to adequately insure long-term risks. I argue that the key to long-term insurance is the importance of intertemporal risk. Long-term risks are difficult to insure because much of the risk concerns variability in the average cost of services used, rather than cross-section heterogeneity in service use. When intertemporal risk is large, insurance will provide indemnity benefits rather than a service benefit, and this in turn will limit demand for insurance. Analysis of long-term care insurance supports this view. An insurer underwriting full long-term care insurance would have a standard deviation of average costs for its pool of policies of 13 percent. Full insurance is essentially non-existent, however. Rather, insurers offer an indemnity payment conditional on use. While I cannot directly test whether this indemnity payment limits demand, I show that other common theories of market failure cannot explain all of the low rate of insurance purchase.

Cutler, David M. 1995. “Cutting Costs and Improving Health: Making Reform Work.” Health Affairs 14 (1): 161-172. Website
Cutler, David M. 1995. “The Incidence of Adverse Medical Outcomes under Prospective Payment.” Econometrica 63 (1): 29-50. Website
Cutler, David M. 1995. “Public Finance Issues in Health Reform.” National Tax Journal - 1994 Proceedings, 1-7. Website
Cutler, David. 1994. “A Guide to Health Care Reform.” Journal of Economic Perspectives 8 (3): 3-17. Publisher's Version
Cutler, David. 1994. “Financing, Estimation, and Economic Effects.” Health Affairs 13 (1): 30-49 . Publisher's Version
Cutler, David. 1994. “Studies in the Economics of Aging.” Studies in the Economics of Aging, edited by David Wise, 395-434. Chicago: University of Chicago Press. Publisher's Version
Cutler, David. 1993. “Sectoral Shifts and Cyclical Unemployment Reconsidered.” Quarterly Journal of Economics 108 (1): 219-243 . Publisher's Version
Cutler, David. 1993. “Demographic Characteristics and the Public Bundle.” Public Finance, 178-198. Publisher's Version
Cutler, David. 1992. “Rising Inequality? Changes in the Distribution of Income and Consumption in the 1980s.” American Economic Review 82 (2): 546-551. Publisher's Version