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on Insurance Economics |
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Issue of 2012‒07‒29
three papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Heiss, Florian; Leive, Adam; McFadden, Daniel; Winter, Joachim |
| Abstract: | We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets, focusing on the ability of consumers to evaluate and optimize their choices of plans. Our analysis of administrative data on medical claims in Medicare Part D suggests that less than 10 percent of individuals enroll in plans that are ex post optimal with respect to total cost (premiums and co-payments). Relative to the benchmark of a static decision rule, similar to the Plan Finder provided by the Medicare administration, that conditions next year’s plan choice only on the drugs consumed in the current year, enrollees lost on average about $300 per year. These numbers are hard to reconcile with decision costs alone; it appears that unless a sizeable fraction of consumers value plan features other than cost, they are not optimizing effectively. |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:384&r=ias |
| By: | Vetter, Stefan; Heiss, Florian; McFadden, Daniel; Winter, Joachim |
| Abstract: | The new Medicare Part D program provides prescription drug coverage for older Americans through highly subsidized and tightly regulated plans offered by private insurance firms. For most eligible individuals without coverage from other sources, obtaining Part D coverage would be rational, but it requires active enrollment and plan choice decisions. We investigate if non-enrollment in Medicare Part D can partly be explained by risk aversion. Data are taken from a national online survey conducted just after the introduction Part D. The survey included a context-free and a context-related hypothetical lottery to measure an individual’s attitude towards risk. Respondents who are risk tolerant according to these measures were significantly less likely to enroll in Part D. We also illustrate that hypothetical choice questions designed to elicit risk attitudes are subject to reference-point effects. Even minor differences in the priming of respondents can result in potentially misleading conclusions about the role of risk aversion in the insurance decisions. |
| JEL: | D03 D81 H51 I1 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:373&r=ias |
| By: | Rofman, Rafael; Oliveri, Maria Laura |
| Abstract: | This document presents an analysis of pension coverage trends in Latin America for the past decades. Its preparation involved the collection, revision, and processing of household surveys in over 18 countries in the region, spanning a period of almost 40 years in some cases. The main goal of this document is to offer comparable data on pension coverage among the economically active population and the elderly, considering the relevance of several demographic, social, and economic variables on these coverage levels. By producing this large and comparable regional dataset, the document supports the discussion of several stylized facts on pension coverage in Latin America. The results show that coverage among active workers is low in most countries, although there has been a relative improvement since the early 1990s. The situation is still distressing among workers in the primary sector or employed by small enterprises as well as for women, primarily because of their persistent lower rates of labor market participation. In recent years coverage of some of the most vulnerable groups has increased, but it still presents very low rates. Among the elderly, regional averages have been very stable since the early 1990s, although this average hides important differences among countries. |
| Keywords: | Population Policies,Insurance&Risk Mitigation,Pensions&Retirement Systems,Debt Markets,Insurance Law |
| Date: | 2012–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:hdnspu:70926&r=ias |