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on Insurance Economics |
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Issue of 2015‒03‒22
eighteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Plastina, Alejandro |
| Date: | 2014–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:39091&r=ias |
| By: | Plastina, Alejandro; Edwards, William |
| Date: | 2014–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:39093&r=ias |
| By: | Vincent Pohl (Queen's University, Ontario) |
| Abstract: | The Patient Protection and Affordable Care Act expands Medicaid and introduces health insurance subsidies, thereby changing work incentives for single mothers. To undertake an ex ante policy evaluation of the employment effects of the PPACA, I structurally estimate a model of labor supply and health insurance choice exploiting existing variation in Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and the intensive margin by six and five percent, respectively. The PPACA leads to crowding-out of employer-sponsored health insurance of about 40 percent and increases single mothers' welfare by about $190 per month. |
| Keywords: | health care reform, Medicaid, labor supply, single mothers |
| JEL: | I18 I3 J2 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:15-222&r=ias |
| By: | Hamid, Syed Abdul |
| Abstract: | Introducing compulsory health insurance for government employees bears immense importance for stepping towards universal healthcare coverage in Bangladesh. Lack of scientific study on designing such scheme, in the Bangladesh context, motivates this paper. The study aims at designing a comprehensive insurance package simultaneously covering health, life and accident related disability risks of the public employees, where the health component would extend to all dependent family members. We mainly analyzed, due to lack of data on the target population for actuarial calculation, the MIS data of group health insurance schemes (offered to various corporate houses) of some reputed insurance companies in Bangladesh. In addition, we consulted with various stakeholders including insurance companies and Insurance Development and Regulatory Authority. Our predicted loading costs including inflationary factor ranges from 10-15 percent. We have outlined the structure of a contributory and cashless health insurance scheme for the public servants and their eligible family members initially for a block period of 5 years. This offers a comprehensive list of surgical and no-surgical inpatient care (including complicated maternal care) available in the public hospitals and empanelled private hospitals. The coverage includes pre-existing illnesses, but excludes dental and ophthalmic care. The scheme offers a benefit of 5 Lakh Taka for covering all medical costs (excluding transport charges) of inpatient care for a block period of 5 years and 5 Lakh Taka for death benefit. The estimated premium is 500 Taka per month (400 Taka per month for health insurance and 100 Taka per month for life and accident related disability insurance).The hospitalization benefit is on a floater basis i.e. the total coverage can be availed of individually or collectively by the employees and their eligible family members during the said block period with no restriction on the number of times of availing. Subscription may be deducted from salary or medical allowance. If the spouse is also a government employee then subscription may be deducted from one of them. Some infrastructural constraints need to be addressed while introducing the scheme. These, for example, are capacity constraints of public hospitals; lack of provision of local fund in the public hospitals for regular maintenance of medical equipment and continuous supply of reagents for diagnostic tests to smoothen the services and increasing quality of care; provision of sufficient amount of all necessary drugs in the public hospitals; lack of an effective referral chain in the public hospitals; capacity constraints of the existing insurance companies; and lack of third party administrator (TPA). Establishing a powerful autonomous body is also crucial, due to capacity constraints of the existing insurance companies, to carry the risk of such a big pool of population. The main role of this body is to manage insurance fund, carry the risk and to monitor and supervise the health services to be provided under the scheme. The role of the insurance companies may be limited to claim settlement, issuing of smart card, etc. |
| Keywords: | Health Insurance, Government Employees, Bangladesh, Concept Paper |
| JEL: | I13 |
| Date: | 2014–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62841&r=ias |
| By: | Supanida Ngiwdee; Ravissa Suchato Author-Email : rsuchato@gmail.com (Department of Agricultural and Resource Economics,Faculty of Economics,Kasetsart University,Thailand) |
| Abstract: | The objectives of this research were to 1) study farmers' perceptions on crop insurance of first rice and 2) examine key characteristics of crop insurance as viewed by farmers. A field survey was conducted to interview 246 famers. The research findings were as follows 1) overall perception of 109 farmers who had purchased the insurance in the past on 17 key characteristics is satisfactory 2) a conjoint analysis exercised on desirable characteristics found that bundling insurance premium with credit is the most preferred option. The second characteristic related to the level of indemnity covered. The last characteristic was the level of premium charged. Among all of the attributes offered, the most preferred option containing attributes consisted of 1) bundling insurance premium with production factor, 2) threshold yield of 276 kilogram per rai; 3) premium payable of 100 Baht; and 4) maximum indemnity of 1,700 Baht per rai. |
| Keywords: | Crop insurance, Area yield index, Major rice, Conjoint analysis |
| JEL: | Q10 Q13 Q18 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:kau:wpaper:201504&r=ias |
| By: | Darius Lakdawalla; Anup Malani; Julian Reif |
| Abstract: | Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial risk. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of future disease. We present an alternative framework that accounts for all these aspects of value and links them to the value of health insurance. We show that any innovation worth buying reduces overall risk, thereby generating positive insurance value on its own. We conduct two empirical exercises to assess the significance of our insights. First, we calculate that conventional methods underestimate the value of historical health gains by 30-80%. Second, we examine a large set of medical technologies and calculate that insurance value on average adds 100% to the conventional valuation of those treatments. Moreover, we find that the physical risk-reduction value of these technologies is ten times greater than the financial risk they pose and the corresponding value of health insurance that insures this financial risk. Our analysis also suggests standard methods disproportionately undervalue treatments for the most severe illnesses, where physical risk to consumers is most costly. |
| JEL: | I13 I18 J17 O30 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21015&r=ias |
| By: | Didem Tuzemen (Federal Reserve Bank of Kansas City); Makoto Nakajima (Federal Reserve Bank of Philadelphia) |
| Abstract: | The Patient Protection and Affordable Care Act (ACA) requires all individuals to have health insurance, and introduces penalties to large firms that do not offer affordable coverage to their employees. While the possible effects of the ACA on the insurance decision of individuals have been studied, what is less studied is how the ACA can affect labor demand. In particular, since the ACA does not require small firms to offer health insurance, and does not require firms to offer health insurance to part-time employees, there are concerns that employers will either stay small, or replace full-time workers with part-time workers in order to avoid offering health insurance to their employees. The main focus of this paper is to study the effects from the distortions caused by the ACA, modeling employer’ decision on hiring part-time and full-time workers, as well as the decision to offer coverage. The aim is to quantify the effect of the possible changes in the size distribution of firms and the composition of the labor force on employment, aggregate output, and welfare. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:1325&r=ias |
| By: | Kostol, Andreas Ravndal (University of Bergen); Mogstad, Magne (University of Chicago) |
| Abstract: | Two key questions in thinking about the size and growth of the disability insurance program are to what extent it discourages work, and how valuable the insurance is to individuals and families. These questions motivate our paper. We begin by describing the earnings, disposable income and consumption of awarded and rejected DI applicants, before and after the disability onset and the allowance decision. Next, we discuss how these descriptive results can be interpreted through the lens of alternative empirical approaches. Our analysis uses a Norwegian population panel data set with detailed information about every individual and household. |
| Keywords: | disability insurance, labor supply, benefit substitution, disposable income |
| JEL: | I38 J62 H53 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8893&r=ias |
| By: | Terence C. Cheng; Joan Costa-i-Font; Nattavudh Powdthavee |
| Abstract: | We exploit lottery wins to investigate the effects of exogenous changes to individuals' income on health care demand in the United Kingdom. This strategy allows us to estimate lottery income elasticities for a range of health care services that are publicly and privately provided. The results indicate that lottery winners with larger wins are more likely to choose private health services than public health services from the National Health Service. For high-income individuals without private medical insurance, the larger their winnings, the more likely they are to obtain private overnight hospital care. For privately insured individuals, the larger their winnings, the more likely they are to obtain private care for dental services and for eye, blood pressure, and cervical examinations. We find that medium to large winners ( $500) are more likely to have private health insurance. Larger winners are also more likely to drop coverage earlier, possibly after their winnings have been exhausted. The elasticities with respect to lottery wins are comparable in magnitude to the elasticities of household income from fixed effect models. |
| Keywords: | Lottery wins, health care, income elasticity, public-private |
| JEL: | H42 I11 D1 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1339&r=ias |
| By: | Antón Arturo; Leal-Ordoñez Julio C. |
| Abstract: | In a typical developing country, coverage of the contributory social security system is low. We analyze the aggregate effects of a revenue-neutral fiscal-cum-social policy reform that consists of: 1) the implementation of universal social insurance to replace the system with low coverage; and 2) the elimination of the social security payroll tax to replace it with a generalized VAT. We find that this reform increases productivity by 2 percent and output by 3 percent as it improves the allocation of resources across firms and sectors, and generates a substantial change in occupational choices. Thus, wages (before transfers) increase for all employees. Also, due to the reconfiguration of transfers, earnings (wages after transfers) for informal employees increase relative to the earnings of formal employees, which decreases inequality. However, the reform could affect some groups in the population, given the regressive nature of VAT and heterogeneity in the valuation of transfers across workers. |
| Keywords: | Universal Social Insurance;Fiscal Reform;Inequality;VAT;Allocation of Resources across Firms and Sectors. |
| JEL: | E62 H55 O17 O47 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdm:wpaper:2015-04&r=ias |
| By: | James Verdier; Alexandra Kruse; Rebecca SweetlLester; Ann Mary Philip; Danielle Chelminsky |
| Abstract: | Dual Eligible Special Needs Plans (D-SNPs) are a type of Medicare Advantage plan that serve beneficiaries dually enrolled in Medicare and Medicaid. To operate in a state, D-SNPs must have a contract with the state to facilitate coordination of Medicare and Medicaid services for enrollees, although states are not required to enter into such contracts. This technical assistance tool is based on an analysis of D-SNP contracts in 12 states, including states that have made the most extensive use of D-SNP contracting by linking D-SNPs to Medicaid managed long-term services and supports (MLTSS) programs that include the main services that Medicaid covers for Medicare-Medicaid enrollees. This tool summarizes how these states have developed those linkages, and describes the specific care coordination and information-sharing requirements that the states have included in their D-SNP contracts. The D-SNP contracting approaches used by this diverse group of 12 states can provide guidance and examples for states that have varying opportunities and resources for D-SNP contracting, including states that choose not to contract with D-SNPs. |
| Keywords: | State contracting, Medicare Advantage, Dual Eligible, Special Needs Plans |
| JEL: | I |
| Date: | 2015–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:2aa1d7d612014c02bc53c7f2d573bee6&r=ias |
| By: | Kate Ho; Joseph Hogan; Fiona Scott Morton |
| Abstract: | Medicare Part D presents a novel privatized structure for a government pharmaceutical benefit. Incentives for firms to provide low prices and high quality are generated by consumers who choose among multiple insurance plans in each market. To date the literature has primarily focused on consumers, and has calculated how much could be saved if they chose better plans. In this paper we take the next analytical step and consider how plans will adjust prices as consumer search behavior improves. We use detailed data on enrollees in New Jersey to demonstrate that consumers switch plans infrequently and imperfectly. We estimate a model of consumer plan choice with inattentive consumers. We then turn to the supply side and examine insurer responses to this behavior. We show that high premiums are consistent with insurers profiting from consumer inertia. We use the demand model and a model of firm pricing to calculate how much lower Part D program costs would be if consumer inattention were removed and plans re-priced in response. Our estimates indicate that consumers would save $536 each, and the government would save $550 million total over three years, when firms' choice of markup is taken into account. Cost growth would also fall: by the last year of our sample government savings would amount to 8.2% of the cost of subsidizing the relevant enrollees. |
| JEL: | I11 L10 L11 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21028&r=ias |
| By: | Rosso, Gianluca; Ricca, Andrea; Chieppa, Alessandro |
| Abstract: | Climate extreme events are constantly increasing. What is the effect of these potentially catastrophic events on insurance demand in Italy, with particular reference to the economic activities? Extreme precipitation events over most of the midlatitude land masses and over wet tropical regions will very likely become more intense and more frequent by the end of this century, as global mean surface temperature increases. If we look to Italy, examination of the precipitation time series shows a sensitive and highly significant decrease in the total number of precipitation events in Italy, with a trend of events intense dissimilar as regards to low and high intensity, with a decline of firsts and an increase of seconds. The risk related to hydrological natural disasters is in Italy one of the most important problem for both damage and number of victims. How evolves the ability to pay for damages, with a view to safeguarding work and economic activities, and employment protection? |
| Keywords: | Climate change, extreme events, precipitations, floods, catastrophic events, insurance, Italy, statistics, regression, fixed effects. |
| JEL: | Q51 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62903&r=ias |
| By: | Gilbert Gimm; Kristin L. Andrews; Jody Schimmel; Henry T. Ireys; Su Liu |
| Abstract: | Congress established the Medicaid Buy-In program when it passed the Balanced Budget Act (BBA) of 1997 and the Ticket to Work and Work Incentives Improvement Act (Ticket Act) of 1999. Under the program, so named because participants “buy into†Medicaid by paying monthly premiums or co-payments, states can offer Medicaid coverage to workers with disabilities whose income and assets would otherwise make them ineligible for Medicaid. To enroll in the program, individuals must have a disability as defined by the Social Security Administration (SSA) and meet certain work and financial eligibility requirements. |
| Keywords: | Medicaid, Medicare, expenditures, service use, Medicaid Buy-In program, dual eligibles |
| JEL: | I J |
| Date: | 2015–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:ae0b8dcae46a40dc8f1e92378bb015f5&r=ias |
| By: | Bünnings, Christian; Schmitz, Hendrik; Tauchmann, Harald; Ziebarth, Nicolas R. |
| Abstract: | This paper empirically assesses the relative role of health plan prices, service quality and optional benefits in the decision to choose a health plan. We link representative German SOEP panel data from 2007 to 2010 to (i) health plan service quality indicators, (ii) measures of voluntary benefit provision on top of federally mandated benefits, and (iii) health plan prices for almost all German health plans. Mixed logit models incorporate a total of 1,700 health plan choices with more than 50 choice sets for each individual. The findings suggest that, compared to prices, health plan service quality and supplemental benefits play a minor role in making a health plan choice. |
| Keywords: | service quality,non-essential benefits,prices,health plan switching,German sickness funds,SOEP |
| JEL: | D12 H51 I11 I13 I18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwqwdp:022015&r=ias |
| By: | Christian Thimann |
| Abstract: | This paper aims at providing a conceptual distinction between banking and insurance with regard to systemic regulation. It discusses key differences and similarities as to how both sectors interact with the financial system. Insurers interact as financial intermediaries and through financial market investments, but do not share the features of banking that give rise to particular systemic risk in that sector, such as the institutional interconnectedness through the interbank market, the maturity transformation combined with leverage, the prevalence of liquidity risk and the operation of the payment system. The paper also draws attention to three salient features in insurance that need to be taken account in systemic regulation: the quasi-absence of leverage, the fundamentally different role of capital and the ‘built-in bail-in’ of a significant part of insurance liabilities through policy-holder participation. Based on these considerations, the paper argues that if certain activities were to give rise to concerns about systemic risk in the case of insurers, regulatory responses other than capital surcharges may be more appropriate. |
| JEL: | F3 G3 |
| Date: | 2014–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61218&r=ias |
| By: | O'Hare, Colin; Li, Youwei |
| Abstract: | In recent years the issue of life expectancy has become of upmost importance to pension providers, insurance companies and the government bodies in the developed world. Significant and consistent improvements in mortality rates and hence life expectancy have led to unprecedented increases in the cost of providing for older ages. This has resulted in an explosion of stochastic mortality models forecasting trends in mortality data in order to anticipate future life expectancy and hence quantify the costs of providing for future ageing populations. Many stochastic models of mortality rates identify linear trends in mortality rates by time, age and cohort and forecast these trends into the future using standard statistical methods. These approaches rely on the assumption that structural breaks in the trend do not exist or do not have a significant impact on the mortality forecasts. Recent literature has started to question this assumption. In this paper we carry out a comprehensive investigation of the presence or otherwise of structural breaks in a selection of leading mortality models. We find that structural breaks are present in the majority of cases. In particular, where there is a structural break present we find that allowing for that improves the forecast result significantly. |
| Keywords: | Mortality; stochastic models; forecasting; structural breaks |
| JEL: | C51 C52 C53 G22 G23 J11 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62994&r=ias |
| By: | James D. Reschovsky; Larisa Converse; Eugene C. Rich |
| Abstract: | A permanent repeal of the sustainable growth rate (SGR) as part of a package of other payment reforms can lead to lower health care costs and improved care, according to this Health Affairs article by Mathematica senior fellow James Reschovsky. The article assesses last year's attempt by Congress to repeal the SGR which is likely to serve as a model for congressional efforts to repeal the SGR this year. Though fundamental policy change is not easy, the benefits of reform potentially outweigh the costs. This study, which will also appear in the April 2015 issue of Health Affairs, was supported by the Commonwealth Fund. |
| Keywords: | physician payment reform, clinician, provider, SGR, health, healthcare |
| JEL: | I |
| Date: | 2015–03–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:e3c05d51778848a7b37c84be0c314c61&r=ias |