|
on Insurance Economics |
|
Issue of 2009‒06‒10
four papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Randall P. Ellis (Boston University, Department of Economics); Elizabeth Savage (University of Technology Sydney, Centre for Health Economics Research and Evaluation, Sydney, Australia) |
| Abstract: | Between 1997 and 2000 the Australian government introduced three policy reforms that aimed to increase private health insurance coverage and reduce public hospital demand. The first provided income-based tax incentives; the second gave an across-the-board 30% premium subsidy; and the third introduced selective age-based premium increases for those enrolling after a deadline. Together the reforms increased enrolment by 50% and reduced the average age of enrollees. The deadline appeared to induce consumers to enroll now rather than delay. We estimate a model of individual insurance decisions and examine the effects of the reforms on the age and income distribution of those with private cover. We interpret the major driver of the increased enrollment as a response to a deadline and an advertising blitz, rather than a pure price response. |
| Keywords: | private health insurance, financial incentives, behavioural decisionmaking |
| JEL: | D12 I11 I18 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2008-013&r=ias |
| By: | Shenyi Jiang (Department of Economics, Boston University); Randall P. Ellis (Department of Economics, Boston University); Tzu-chun Kuo (DxCG, Inc.) |
| Abstract: | The paper examines whether patterns of service level spending in capitated managed care plans differ from those in traditional non-managed care health plans. We apply the service selection model of Ellis and McGuire (2007) to recent, highly disaggregated commercial insurance data from Medstat MarketScan. Rankings of services by selection incentives give largely the same rankings as the EM results for Medicare. We next calculate selection indices separately for four types of health plans: non-managed care comprehensive, preferred provider organization (PPO) plans, managed care point of service (POS) and health maintenance organization (HMO) plans. Our results imply high correlations and similar rankings of selection indices across plan types. We then test whether services predicted to be underprovided indeed have less than average rates of spending by managed care plans, while non-managed care plans have above average rates of spending. Stronger evidence of selection distortions among the four plan types is found when decomposing spending by type of service and provider specialty than by place of service. |
| Keywords: | Health plans; Adverse selection; Managed care |
| JEL: | I11 C21 D12 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:bos:wpaper:wp2007-43&r=ias |
| By: | Seo, John; Mahul, Olivier |
| Abstract: | Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years’ worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios. |
| Keywords: | Natural Disasters,Hazard Risk Management,Insurance&Risk Mitigation,Disaster Management,Insurance Law |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4959&r=ias |
| By: | Masami Imai (Department of Economics, Wesleyan University); Seitaro Takarabe |
| Abstract: | Finding the causal effects of liquidity shocks on credit supply is complicated by the endogenous relation between loan demand and liquidity position of banks. This paper attempts to overcome this problem by exploiting, as a natural experiment, the exogenous deposit outflow prompted by the removal of a blanket deposit guarantee on time deposits in Japan. We find that just as the government placed a cap on insurance for time deposits in 2002, weak banks suffered from a large outflow of partially insured time deposits. More importantly, we find that those weak banks were not able to raise a sufficient amount of fully insured ordinary deposits to make up for the loss of time deposits, which, consequently, forced them to cut back on loan supply. These results are consistent with the theory that the imperfect substitutability of insured deposits and uninsured deposits affects the tightness of banks’ financing constraints and ultimately the supply of bank loans. |
| Keywords: | Deposit Insurance, Bank Lending Channel, Japan, Natural Experiment |
| JEL: | E44 G21 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:wes:weswpa:2009-001&r=ias |