nep-ias New Economics Papers
on Insurance Economics
Issue of 2008‒07‒14
three papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Consumer-Directed Health Care: Can Consumers Look After Themselves? By McFadden, Daniel; Winter, Joachim; Heiss, Florian
  2. Do Unemployment Benefits Increase Unemployment? New Evidence on an Old Question By Fredriksson, Peter; Söderström, Martin
  3. Has Public Health Insurance for Older Children Reduced Disparities in Access to Care and Health Outcomes? By Janet Currie; Sandra Decker; Wanchuan Lin

  1. By: McFadden, Daniel; Winter, Joachim; Heiss, Florian
    Abstract: In health care systems today, including those of Switzerland and the United States, participants do not necessarily see the big picture of lifetime health costs and quality of life, and in many systems consumers and providers lack the incentives to manage preventative and chronic care to minimize lifetime private and social health costs. Resource allocation problems induced by asymmetric information and misaligned incentives are exacerbated if consumers fail to have the acuity or perspective needed to make choices consistent with their self-interest when faced with complex health care choices with ambiguous future consequences. This paper examines rationality of consumers’ health perceptions and choices using as a natural experiment the recent introduction in the United States of a highly subsidized market for prescription drug insurance, and draws lessons from this experiment on the practicality of “Consumer Directed Health Care” as an approach to achieving efficient allocation of health care resources by confronting consumers with the full marginal costs of the services they use.
    Keywords: prescription drugs; health insurance; Medicare Part D
    JEL: I10 D12 H51
    Date: 2008–07–07
  2. By: Fredriksson, Peter (IFAU); Söderström, Martin (National Institute of Economic Research)
    Abstract: We examine the relationship between unemployment benefits and unemployment using Swedish regional data. To estimate the effect of an increase in unemployment insurance (UI) on unemployment we exploit the ceiling on UI benefits. The benefit ceiling, coupled with the fact that there are regional wage differentials, implies that the generosity of UI varies regionally. More importantly, the actual generosity of UI varies within region over time due to variations in the benefit ceiling. We find fairly robust evidence suggesting that the actual generosity of UI does matter for regional unemployment. Increases in the actual replacement rate contribute to higher unemployment as suggested by theory. We also show that removing the wage cap in UI benefit receipt would reduce the dispersion of regional unemployment. This result is due to the fact that low unemployment regions tend to be high wage regions where the benefit ceiling has a greater bite. Removing the benefit ceiling thus implies that the actual generosity of UI increases more in low unemployment regions.
    Keywords: unemployment, unemployment insurance, unemployment dispersion
    JEL: J64 J65
    Date: 2008–06
  3. By: Janet Currie; Sandra Decker; Wanchuan Lin
    Abstract: This paper investigates the effects of expanding public health insurance eligibility for older children. Using data from the National Health Interview Surveys from 1986 to 2005, we first show that although income continues to be an important predictor of children’s health status, the importance of income for predicting health has fallen for children 9 to 17 in recent years. We then investigate the extent to which the dramatic expansions in public health insurance coverage for these children in the past decade are responsible for the decline in the importance of income. We find that while eligibility for public health insurance unambiguously improves current utilization of preventive care, it has little effect on current health status. However, we find some evidence that Medicaid eligibility in early childhood has positive effects on future health. This may indicate that adequate medical care early on puts children on a better health trajectory, resulting in better health as they grow.
    JEL: I11 I12
    Date: 2008–07

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