|
on Insurance Economics |
|
Issue of 2005‒08‒13
eleven papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Annemiek van VUren; Daniël van Vuuren |
| Abstract: | In this paper, we assess the impact of financial incentives on the inflow in the public Disability Insurance (DI) scheme in the Netherlands. For this matter, the variation in replacement rates over different sectors is exploited to estimate the probability of DI enrolment over a sample of employees from the Dutch Income Panel (1996-2000). On the basis of these administrative data, we find a point estimate of the elasticity of DI enrolment with respect to the DI wealth rate of 2.5. |
| Keywords: | Disability Insurance; financial incentives; moral hazard |
| JEL: | C25 C81 H3 J6 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:45&r=ias |
| By: | Ali al-Nowaihi; Sanjit Dhami |
| Abstract: | Evidence shows that (i) people overweight low probabilities and underweight high probabilities, but (ii) ignore events of extremely low probability and treat extremely high probability events as certain. Decision models, such as rank dependent utility (RDU) and cumulative prospect theory (CP), use probability weighting functions. Existing probability weighting functions incorporate (i) but not (ii). Our contribution is threefold. First, we show that this would lead people, even when premiums are actuarially unfair, to insure fully against all losses of sufficiently low probability and to gamble as much as possible for any gain of sufficiently low probability. This is contrary to the evidence. Second, we introduce a new class of probability weighting functions, which we call higher order Prelec probability weighting functions, that incorporate (i) and (ii). Third, we show that if RDU or CP are combined with our new probability weighting function, then a decision maker will not buy insurance against a loss, nor gamble for a gain, of sufficiently low probability; in agreement with the evidence. |
| Keywords: | Decision making under risk; Prelec’s probability weighting function; Higher order Prelec probability weighting functions; Behavioral economics; Rank dependent utility theory; Prospect theory; Insurance; Gambling |
| JEL: | C60 D81 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:05/19&r=ias |
| By: | Anja Deelen |
| Abstract: | In this paper, we analyse the employers' decision to opt out of the public disability insurance (DI) system. For the empirical analysis we use an extensive panel of Dutch employers for the period 2000-2002. We find that cross-subsidies employers pay or receive under the current public insurance system of experience rating contribute to the opting out decision. Since cross-subsidies are risk related, this is an indication for the presence of adverse selection: high risk (cross-subsidised) firms tend to remain publicly insured, while low risk (cross subsidising) firms tend to opt out. This finding is supported by the fact that risk related characteristics such as the sector of industry and the composition of the work force by age and gender contribute to the explanation of the opting-out decision. Adverse selection could be diminished by setting public premiums in such a way that they are more actuarial fair in the long run. As a result, the risk profile of firms opting out will become more similar to that of firms not opting out. |
| Keywords: | adverse selection; cross-subsidies; disability insurance; premium differentiation |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:46&r=ias |
| By: | Jay Bhattacharya; Neeraj Sood |
| Abstract: | If rational individuals pay the full costs of their decisions about food intake and exercise, economists, policy makers, and public health officials should treat the obesity epidemic as a matter of indifference. In this paper, we show that, as long as insurance premiums are not risk rated for obesity, health insurance coverage systematically shields those covered from the full costs of physical inactivity and overeating. Since the obese consume significantly more medical resources than the non-obese, but pay the same health insurance premiums, they impose a negative externality on normal weight individuals in their insurance pool. To estimate the size of this externality, we develop a model of weight loss and health insurance under two regimes——(1) underwriting on weight is allowed, and (2) underwriting on weight is not allowed. We show that under regime (1), there is no obesity externality. Under regime (2), where there is an obesity externality, all plan participants face inefficient incentives to undertake unpleasant dieting and exercise. These reduced incentives lead to inefficient increases in body weight, and reduced social welfare. Using data on medical expenditures and body weight from the National Health and Interview Survey and the Medical Expenditure Panel Survey, we estimate that, in a health plan with a coinsurance rate of 17.5%, the obesity externality imposes a welfare cost of about $150 per capita. Our results also indicate that the welfare loss can be reduced by technological change that lowers the pecuniary and non-pecuniary costs of losing weight, and also by increasing the coinsurance rate. |
| JEL: | I1 D6 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11529&r=ias |
| By: | Francesca Colombo; Nicole Tapay |
| Abstract: | <P><OL><LI>This paper analyses the Slovak health insurance system and the policy challenges it faces. It describes the structure of health coverage and health sector reforms being implemented by the Slovak government. It provides a preliminary assessment of the possible impact of such reforms, with a focus on the health insurance system and the possible introduction of private health insurance (PHI). It assesses how private health insurance would impact upon the health system, particularly equity, efficiency incentives facing providers and insurers, and responsiveness.</LI> <LI>The Slovak health system is based upon a mandatory Bismarck-style social health insurance system. Contributions are shared between employers and employees and the state contributes for the inactive population. Five non-profit and non-competing insurers operate nationwide, one of which covers two-thirds of the population. Individuals can freely enrol with any of the insurance companies and a risk equalisation system operates ...</LI></OL></P> <P><OL><LI>Ce document présente une analyse du système d’assurance de santé Slovaque et les défis politiques que celui-ci engendre. Une description de la structure de couverture santé et des réformes mises en oeuvre par le gouvernement Slovaque y est présentée ainsi qu’une évaluation préliminaire de l’impact possible de telles réformes. L’accent est porté sur le système d’assurance-maladie et l’introduction possible d’une assurance maladie privée (AMP). Y figure également une évaluation de la manière dont une AMP aura des répercussions sur le système de santé lui-même et plus particulièrement en ce qui concerne l’équité et les incitations à l’efficience auxquelles sont confrontés les fournisseurs de services et les assureurs et la réactivité du système de santé face aux besoins des utilisateurs.</LI> <LI>Le système de santé Slovaque et basé sur un système d’assurance maladie sociale obligatoire du style Bismarck. Les contributions sont partagées entre les employeurs et les employés avec une ...</LI></OL></P> |
| JEL: | I11 I18 I19 |
| Date: | 2004–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaac:11-en&r=ias |
| By: | Francesca Colombo; Nicole Tapay |
| Abstract: | <P><OL><LI>This paper analyses the Irish private health insurance (PHI) market. It describes how PHI interacts with the public system, and assesses its contribution to equity, efficiency and responsiveness of the health system. The analysis identifies some of the factors affecting insurance market performance and its impact on the health system, including market characteristics, the regulatory and fiscal environment, health system organisation, and any actors’ incentives and behaviours.</LI> <LI>PHI plays a prominent role in Ireland. The health system is designed to offer comprehensive publicly funded health services to low-income groups, and universal public hospital coverage. Policies have encouraged the development of PHI to provide all individuals with a private alternative to the public system, as well as a means of funding cost-sharing and services not covered by the public system. With the implementation of the requirements of the Third EU Non-Life Directive, the PHI market, historically ...</LI></OL></P> <P><OL><LI>Cet article analyse le marché de l'assurance maladie privée (AMP) en Irlande. Il décrit comment l'assurance maladie privée interagit avec le système public et évalue sa contribution à l’équité, l'efficacité et la réactivité du système de santé. Cette analyse identifie certains facteurs affectant la performance, y compris les caractéristiques du marché de l'assurance privée, la régulation et le cadre financier, l'organisation du système de santé, ainsi que les incitations et le comportement des différents acteurs.</LI> <LI>L'AMP joue un rôle important en Irlande. Le système de santé offre des services de santé complets financés par des fonds publics aux groupes à bas revenus ainsi qu’une couverture universelle de frais d’hospitalisation. Les politiques de la santé ont encouragé le développement de l'AMP afin d’assurer à tous les individus une alternative au système public ainsi qu’un moyen pour financier le ticket modérateur et les services qui ne sont pas couverts par le système public ...</LI></OL></P> |
| JEL: | I11 I18 I19 |
| Date: | 2004–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:10-en&r=ias |
| By: | Francesca Colombo; Nicole Tapay |
| Abstract: | <P><OL><LI>This paper analyses the Slovak health insurance system and the policy challenges it faces. It describes the structure of health coverage and health sector reforms being implemented by the Slovak government. It provides a preliminary assessment of the possible impact of such reforms, with a focus on the health insurance system and the possible introduction of private health insurance (PHI). It assesses how private health insurance would impact upon the health system, particularly equity, efficiency incentives facing providers and insurers, and responsiveness.</LI></OL></P><P><OL><LI>The Slovak health system is based upon a mandatory Bismarck-style social health insurance system. Contributions are shared between employers and employees and the state contributes for the inactive population. Five non-profit and non-competing insurers operate nationwide, one of which covers two-thirds of the population. Individuals can freely enrol with any of the insurance companies and a risk equalisation system ...</LI></OL></P> <P><OL><LI>Ce document présente une analyse du système d’assurance de santé Slovaque et les défis politiques que celui-ci engendre. Une description de la structure de couverture santé et des réformes mises en oeuvre par le gouvernement Slovaque y est présentée ainsi qu’une évaluation préliminaire de l’impact possible de telles réformes. L’accent est porté sur le système d’assurance-maladie et l’introduction possible d’une assurance maladie privée (AMP). Y figure également une évaluation de la manière dont une AMP aura des répercussions sur le système de santé lui-même et plus particulièrement en ce qui concerne l’équité et les incitations à l’efficience auxquelles sont confrontés les fournisseurs de services et les assureurs et la réactivité du système de santé face aux besoins des utilisateurs.</LI></OL></P><P><OL><LI>Le système de santé Slovaque et basé sur un système d’assurance maladie sociale obligatoire du style Bismarck. Les contributions sont partagées entre les employeurs et les employés avec une ...</LI></OL></P> |
| JEL: | I11 I18 I19 |
| Date: | 2004–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:11-en&r=ias |
| By: | Thomas C. Buchmueller; Agnes Couffinhal |
| Abstract: | <P><OL><LI>While France has a universal public health insurance system, the coverage it provides is incomplete and the vast majority the French population has private complementary health insurance. Among OECD countries, the share of health care financed by private insurance is third highest behind the US and the Netherlands, two countries where private coverage is the primary source of payment for a large percentage of the population.</LI> <LI>France’s high rate of private insurance coverage is partly explained by historical factors and partly by the preferential tax treatment of employer-sponsored coverage. Because of the high rate of employerprovision – roughly half of all contracts are obtained through the workplace – coverage tends to vary with activity and industry classification. Historically, coverage was also positively related with income. In 2000, the French government introduced a new program, the <I>Couverture Maladie Universelle</I> (CMU), which extended eligibility for publicly funded ...</LI></OL></P> <P><OL><LI>Si la France a un système d'assurance maladie publique universel, la couverture qu'il propose n'est pas complète et la majorité de la population française a une assurance complémentaire privée. La France est le troisième pays de l'OCDE en ce qui concerne la part des dépenses de santé financée par l'assurance privée, après les Etats-Unis et les Pays-Bas, deux pays où l'assurance privée représente la seule source de couverture pour une grande partie de la population.</LI> <LI>L'importance de l'assurance privée en France s'explique pour partie par des facteurs historiques mais aussi par le traitement fiscal préférentiel dont bénéficient les assurances de groupe. Etant donnée qu'environ la moitié des contrats sont obtenus par le biais de l'emploi, la couverture est très liée à la participation au marché du travail et au secteur d'activité. Historiquement, le taux couverture de la population augmentait avec le revenu. En 2000, le gouvernement a mis en place un nouveau programme public, la ...</LI></OL></P> |
| JEL: | I11 I18 I19 |
| Date: | 2004–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:12-en&r=ias |
| By: | Francesca Colombo; Nicole Tapay |
| Abstract: | <P><OL><LI>Governments often look to private health insurance (PHI) as a possible means of addressing some health system challenges. For example, they may consider enhancing its role as an alternative source of health financing and a way to increase system capacity, or promoting it as a tool to further additional health policy goals, such as enhanced individual responsibility. In some countries policy makers regard PHI as a key element of their health coverage systems</LI></OL></P><P><OL><LI>While private health insurance represents, on average, only a small share of total health funding across the OECD area, it plays a significant role in health financing in some OECD countries and it covers at least 30% of the population in a third of the OECD members. It also plays a variety of roles, ranging from primary coverage for particular population groups to a supporting role for public systems.</LI></OL></P><P><OL><LI>This paper assesses evidence on the effects of PHI in different national contexts and draws conclusions about its ...</LI></OL></P> <P><OL><LI>Certains gouvernements voient dans l’assurance maladie privée un moyen de relever quelquesuns des défis liés aux systèmes de santé. Par exemple, certains envisagent de promouvoir son rôle de source de financement de substitution, de l’utiliser pour accroître les capacités du système, ou encore de la faire contribuer à la réalisation d’autres objectifs de la politique de santé, tels que le renforcement de la responsabilité individuelle. Dans certains pays, les décideurs considèrent l’assurance maladie privée comme un élément fondamental du système de couverture maladie.</LI></OL></P><P><OL><LI>Bien que l’assurance maladie privée ne représente en moyenne qu’une petite fraction du financement total des dépenses de santé dans la zone OCDE, elle constitue dans quelques pays Membres un mode de financement important des soins et couvre au moins 30 pour cent de la population dans un tiers des pays de l’OCDE. Elle joue par ailleurs des rôles multiples, allant de l’octroi d’une couverture primaire à des ...</LI></OL></P> |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:15-en&r=ias |
| By: | Francesca Colombo; Nicole Tapay |
| Abstract: | <P><OL><LI>Private health insurance (PHI) is the sole source of primary health coverage for a third of the Netherlands’ population earning above a set income threshold. Social insurance (together with limited public (tax-based financing) is the main source of health coverage for the majority of the population. Most socially insured also purchase supplementary private health coverage. All citizens are eligible for a system of coverage for long-term care and care for the chronically ill. Thus, in the Netherlands, the source of health financing is determined according to the category of health risk, type of illness, as well as income level. Decisions have been made allocating the cost of more expensive long-term care and coverage of high-risk individuals and persons earning below a set level, to social or public insurance, or to PHI subsidised by a broader pool.</LI></OL></P><P><OL><LI>From an equity perspective, the Dutch public/private financing mix appears to do well, although challenges remain. There appear to be ...</LI></OL></P> <P><OL><LI>Pour les Néerlandais situés dans le tiers supérieur de l’échelle des revenus, l’assurance maladie privée constitue l’unique source de couverture maladie primaire. L’assurance sociale (et, dans une mesure restreinte, certains financements publics d’origine fiscale) représente pour sa part la principale source de couverture maladie pour la majorité de la population. La plupart des affiliés au régime social sont également titulaires d’une couverture maladie privée supplémentarité. Tous les citoyens sont admissibles à une couverture pour soins de longue durée, et les soins aux malades chroniques sont également couverts. Aux Pays-Bas, la source de financement des soins de santé est donc déterminée selon la catégorie de risque de santé, le type de maladie ainsi que le niveau de revenu. La décision a été prise d’allouer les coûts induits par les soins de longue durée (plus onéreux), les personnes à haut risque et les personnes gagnant moins d’un certain revenu à l’assurance sociale ou ...</LI></OL></P> |
| JEL: | I11 I18 I19 |
| Date: | 2004–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaad:18-en&r=ias |
| By: | Christopher J. O'Leary (W.E. Upjohn Institute); Stephen A. Wandner (U.S. Department of Labor) |
| Abstract: | This paper summarizes state unemployment insurance job search policies based on a recent survey of states by the National Association of State Workforce Agencies. It then reviews research results on the effects of reemployment services on durations of insured unemployment. The paper documents how state administrative practices have changed and questions whether these changes may have affected monitoring of claimant compliance with work search requirements. Since state policies on job search and service referral can affect insured durations of unemployment, these policies can also affect the measured total unemployment rate. This paper reflects the opinions of the authors and does not necessarily reflect the positions or viewpoints of the W.E. Upjohn Institute for Employment Research or the U.S. Department of Labor. |
| Keywords: | unemployment insurance, work test, job search assistance, reemployment, public employment service |
| JEL: | I18 J68 H43 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:05-112&r=ias |