nep-ias New Economics Papers
on Insurance Economics
Issue of 2015‒10‒25
nine papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Maximizing Coverage through Outreach: Second Year Experiences of Enroll America in North Carolina and Ohio By Cara Orfield; Sheila Hoag; Sean Orzol
  2. Losing Health Insurance When Young: Impacts on Usage of Medical Services and Health By Dolores De la Mata; Carlos Felipe Gaviria
  3. Demand and impact of crop microinsurance in India By Ramasubramanian, Janani Akhilandeswari
  4. Networks and Misallocation: Insurance, Migration, and the Rural-Urban Wage Gap By Kaivan Munshi; Mark Rosenzweig
  5. Income smoothing mechanisms after labor market transitions By Nuno Alves; Carlos Martins
  6. Insuring Your Donation – An Experiment By Renate Buijze; Christoph Engel; Sigrid Hemels
  7. Prevention Incentives in Long-Term Insurance Contracts By Renaud Bourlès
  8. Competitive Grant-Making: A Review of the Literature By Cara Orfield; Debra Lipson; Sheila Hoag
  9. Medicaid 1115 Demonstration Evaluation Design Plan By Carol V. Irvin; Debra Lipson; Carey Appold; Maggie Colby; Katharine Bradley; Jessica Heeringa; Jenna Libersky; Vivian L. H. Byrd; Julia Baller

  1. By: Cara Orfield; Sheila Hoag; Sean Orzol
    Abstract: This report examines the implementation of Enroll America’s outreach campaign during the second open enrollment period under the Affordable Care Act (ACA) in two states: North Carolina and Ohio. Findings document the progress and adaptations made by Enroll America during the second open enrollment period, challenges that it successfully addressed during this period, and future challenges and opportunities it can expect to face as it enters the third open enrollment period.
    Keywords: Enroll America, outreach and enrollment, Affordable Care Act, health insurance marketplaces
    JEL: I
    Date: 2015–10–07
  2. By: Dolores De la Mata (The Institute of Economics, Zagreb); Carlos Felipe Gaviria (The Institute of Economics, Zagreb)
    Abstract: In this study we exploit a regulation in Colombia that exogenously changes health insurance coverage of young adult dependents, specifically those turning 18 years old, to analyze the effects of losing health insurance coverage on their health service usage and health status. We assess this effect using a regression discontinuity design (RDD) and data from the Encuesta Nacional de Calidad de Vida Survey for Colombia from 2010 to 2013. Losing coverage implies an increase in the cost of some medical services which may reduce their consumption (i.e. preventive services). Additionally, since under Colombian regulations, emergency department (ED) visits cannot be denied to anyone, regardless of health insurance status, uninsured young adults tend to use this service more instead of regular medical services (such as preventive healthcare or visits to physicians or specialists). We find, consistent with the change in relative prices, that losing health insurance when turning 18 years old increases the visits to the ED, reduces preventive care visits with a physician, and reduces the usage of other medical services. These results imply a substitution of cheaper medical services for more expensive ones when individuals turn 18 years old in Colombia.
    Keywords: Health Insurance, Young Adults, Healthcare Usage, Emergency Department Visits, Columbia’s Healthcare System, Regression Discontinuity, Developing Country
    JEL: G22 I13 I18
    Date: 2015–08
  3. By: Ramasubramanian, Janani Akhilandeswari
    Abstract: This thesis presents an analysis of the demand and impact of crop microinsurance in India. The study is based on extensive fieldwork and primary data collection from two field sites in India. The first empirical chapter examines the impact of crop microinsurance on output. Accounting for the endogeneity of insurance investment, this chapter uses a two-step instrumental variables approach to assess the impact of insurance on yield for two varieties of paddy. The assessment is based on secondary district level data and primary household survey data. The findings indicate that impact of insurance on yield is not homogeneous across crops. It is based on the flexibility of the crop’s input requirement structure.The second chapter explores the impact of crop insurance on the use of inputs such as seeds, fertilizers, pesticides, irrigation and labour for paddy varieties. This chapter is a significant addition to the existing small pool of literature on the impacts of crop insurance on a range of inputs. Since both insurance and input decisions are ex-ante, a simultaneous equations model is employed to assess impacts. Results show that the impact of crop microinsurance varies based on the type of input, crop under consideration and its significance in the income portfolio of a farmer. The final chapter assesses the demand for crop microinsurance using a contingent valuation experiment on turmeric farmers. This is a first of its kind attempt to delineate the willingness to join (WTJ) from the amount of willingness to pay (WTP) for crop insurance policies. Results based on a Heckman selection model, indicate that while the WTJ is influenced by risk attitudes and product literacy, the amount of WTP is driven by a careful assessment of the other risk coping avenues available to a household. Only the ‘residual’ risk is passed on to insurance.
    Date: 2015–05
  4. By: Kaivan Munshi (University of Cambridge); Mark Rosenzweig (Yale University)
    Abstract: We provide an explanation for the large spatial wage disparities and low male migration in India based on the trade-off between consumption-smoothing, provided by caste-based rural insurance networks, and the income-gains from migration. Our theory generates two key empirically-verified predictions: (i) males in relatively wealthy households within a caste who benefit less from the redistributive (surplus-maximizing) network will be more likely to migrate, and (ii) males in households facing greater rural income-risk (who benefit more from the insurance network) migrate less. Structural estimates show that small improvements in formal insurance decrease the spatial misallocation of labor by substantially increasing migration.
    Date: 2015–10
  5. By: Nuno Alves; Carlos Martins
    Abstract: This article quantifies several household income smoothing mechanisms following labor market shocks. These shocks correspond to individual transitions between employment, unemployment and inactivity. The analysis covers 25 European countries for the period 2004-2011. We identify the relative role of labor and non-labor household income sources, income taxes and individual and household transfers in smoothing income fluctuations. We conclude that the tax and transfer system is the main household insurance mechanism following individual labor market transitions. This finding is robust before and after the Great Recession of 2009. Quantitatively, the relative role of these smoothing mechanisms is conditional on the characteristics of the labor market shock and varies across countries in the sample. Finally, even though we do not identify a relevant labor market response of household members in the intensive margin, household income pooling is an important smoothing mechanism among couples.
    JEL: D31 J6 O15
    Date: 2015
  6. By: Renate Buijze (Erasmus University Rotterdam (EUR) - Erasmus School of Law); Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn); Sigrid Hemels (Erasmus University Rotterdam (EUR) - Erasmus School of Law)
    Abstract: An increasing fraction of donations is channeled through donation intermediaries. These entities serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax benefit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the uncertainty affects the proper use of their donation.
    Keywords: Insurance, charity, Donation, donation intermediary
    JEL: D64 H25 D03 H31 D12 G22 K34 L31
    Date: 2015–10
  7. By: Renaud Bourlès (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: Long-term insurance contracts are widespread, particularly in public health and the labor market. Such contracts typically involve monthly or annual premia which are related to the insured’s risk profile, where a given profile might change based on observed outcomes which depend on the insured’s prevention efforts. The aim of this paper is to analyze the latter relationship. In a two-period optimal insurance contract in which the insured’s risk profile is partly governed by the effort he puts on prevention, we find that both the insured’s risk aversion and prudence play a crucial role. If absolute prudence is greater than twice absolute risk aversion, moral hazard justifies setting a higher premium in the first period but also greater premium discrimination in the second period. For specific utility functions, moreover, an increase in the gap between prudence and risk aversion increases the initial premium and the subsequent premium discrimination. These results provide insights on the tradeoffs between long-term insurance and the incentives for primary prevention arising from risk classification, as well as between inter- and intra-generational insurance.
    Keywords: long-term insurance, classification risk, moral hazard, prudence
    Date: 2015–10
  8. By: Cara Orfield; Debra Lipson; Sheila Hoag
    Abstract: As part of the evaluation of the Cities Expanding Health Access for Children and Families (CEHACF) program for Atlantic Philanthropies, Mathematica Policy Research conducted a targeted literature review of scholarly and other published sources to identify previous publications regarding competitive grant-making strategies. For this literature review, competitive grant-making is defined as a process whereby philanthropic organizations clearly define their goals and objectives, require bidders to compete against each other (sometimes through multiple rounds), thoroughly review those proposals, and grant awards to the strongest bids.
    Keywords: Competitive grant-making, philanthropic sustainability, foundation funding
    JEL: I
    Date: 2015–04–23
  9. By: Carol V. Irvin; Debra Lipson; Carey Appold; Maggie Colby; Katharine Bradley; Jessica Heeringa; Jenna Libersky; Vivian L. H. Byrd; Julia Baller
    Abstract: This report lays out the general design and approach Mathematica will use to evaluate four different types of Medicaid section 1115 demonstration waivers: (1) Delivery System Reform Incentive Payments (DSRIP), (2) Premium Assistance Medicaid expansions, (3) Beneficiary Engagement/Premium Payment demonstrations, and (4) Managed Long-Term Services and Supports programs. This plan focuses on the research questions that will guide the work and discusses relevant outcome measures, data sources, and general methodological approaches.
    Keywords: Medicaid, section 1115 demonstrations, delivery system reform, provider incentive payments, premium assistance, beneficiary engagement, premium payments, managed long-term services and supports, MLTSS
    JEL: I J
    Date: 2015–05–15

This nep-ias issue is ©2015 by Soumitra K. Mallick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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