nep-ias New Economics Papers
on Insurance Economics
Issue of 2016‒05‒14
twelve papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States By Charles Courtemanche; James Marton; Benjamin Ukert; Aaron Yelowitz; Daniela Zapata
  2. Job Displacement Insurance: A Policy Typology By Parsons, Donald O.
  3. Community-Based Health Insurance and Out-of-Pocket Healthcare Spending in Africa: Evidence from Rwanda By Woldemichael, Andinet; Gurara, Daniel Zerfu; Shimeles, Abebe
  4. Consumer Preferences for Pet Health Insurance By Williams, Angelica; Coble, Keith H.; Williams, Brian; Dicks, Michael; Knippenberg, Ross
  5. Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026 By Congressional Budget Office
  6. Leaving the market or reducing the coverage? By Anne Corcos; François Pannequin; Claude Montmarquette
  7. An Evaluation of SOAR: Implementation and Outcomes of an Effort to Improve Access to SSI and SSDI By Jacqueline F. Kauff; Elizabeth Clary; Kristin Sue Lupfer; Pamela J. Fischer
  8. Private Health Insurance Premiums and Federal Policy By Congressional Budget Office
  9. Private Health Insurance Premiums and Federal Policy By Congressional Budget Office
  10. Are Counties Major Players in Public Pension Plans? By Alicia H. Munnell; Jean-Pierre Aubry
  11. Changes in Medicare Spending per Beneficiary by Age: Working Paper 2015-08 By Xiaotong Niu; Melinda Buntin; Joyce Manchester
  12. Job Displacement Risk and Severance Pay By Marco Cozzi; Giulio Fella

  1. By: Charles Courtemanche; James Marton; Benjamin Ukert; Aaron Yelowitz; Daniela Zapata
    Abstract: The Affordable Care Act (ACA) aimed to achieve nearly universal health insurance coverage in the United States through a combination of insurance market reforms, mandates, subsidies, health insurance exchanges, and Medicaid expansions, most of which took effect in 2014. This paper estimates the causal effects of the ACA on health insurance coverage using data from the American Community Survey. We utilize difference-in-difference-in-differences models that exploit cross-sectional variation in the intensity of treatment arising from state participation in the Medicaid expansion and local area pre-ACA uninsured rates. This strategy allows us to identify the effects of the ACA in both Medicaid expansion and non-expansion states. Our preferred specification suggests that, at the average pre-treatment uninsured rate, the full ACA increased the proportion of residents with insurance by 5.9 percentage points compared to 3.0 percentage points in states that did not expand Medicaid. Private insurance expansions from the ACA were due to increases in both employer-provided and non-group coverage. The coverage gains from the full ACA were largest for those with incomes below the Medicaid eligibility threshold, non-whites, young adults, and unmarried individuals. We find some evidence that the Medicaid expansion partially crowded out private coverage among low-income individuals.
    JEL: I13
    Date: 2016–04
  2. By: Parsons, Donald O. (George Washington University)
    Abstract: Efforts to insure long-tenured displacement workers against earnings losses from unemployment spells and lower wages on subsequent jobs have led to an array of government and employer programs. A policy typology is proposed to impose order on these programmatic efforts. The basic typology involves the familiar distinction between (i) separation benefit type – fixed sum severance or unemployment-linked – and (ii) financing type – insurance or savings. In this four-way categorization, severance savings accounts are the least familiar, perhaps because they are often mislabeled as unemployment insurance savings accounts (UISA). A third policy dimension – the job separation events that trigger plan payouts – is also fundamental to understanding program performance and consequences. Indeed insurance plan performance converges on that of savings plans as the range of insured events and their likelihoods expand. Severance "savings" plans require payouts other than for involuntary separation, most commonly for retirement, which highlights the link with pensions. Conversely the severance properties of pension plans vary with ownership rights (vesting) and "rollover" rules. Forced savings plans that also permit fund access for house purchases and/or human capital investments (provident funds) are an obvious extension of strict severance savings plans.
    Keywords: job displacement, unemployment insurance, severance pay, moral hazard, job turnover, pensions, provident funds
    JEL: J65 J41 J33
    Date: 2016–04
  3. By: Woldemichael, Andinet (African Development Bank); Gurara, Daniel Zerfu (International Monetary Fund); Shimeles, Abebe (African Development Bank)
    Abstract: In the absence of third party and prepayment systems such as health insurance and tax-based healthcare financing, households in many low-income countries are exposed to the financial risks of paying large medical bills from out-of-pocket. In recent years, community based health insurance schemes have become popular alternatives to fill such void in the healthcare financing systems. This paper investigates the impact of these schemes on out-of-pocket spending based on three rounds of nationally representative data from Rwanda. We estimate an Extended Two-Part Model to address endogeniety in insurance enrollment and censoring in healthcare expenditure data. We find that community based health insurance program has non-linear and mixed impacts on out-of-pocket expenditure. While the program significantly increases the probability of overall spending, it decreases the amount of per capita spending on healthcare. The program also significantly reduces spending on drug but increases outpatient spending with no detectable impact on inpatient services. Furthermore, we find notable heterogeneity in treatment effects in which households in the top income distribution realize the highest reduction in out-of-pocket spending.
    Keywords: impact, health insurance, out-of-pocket, low-income, endogeneity
    JEL: C21 C34 D04 I13 I15
    Date: 2016–04
  4. By: Williams, Angelica; Coble, Keith H.; Williams, Brian; Dicks, Michael; Knippenberg, Ross
    Abstract: This study uses a choice experiment survey to examine pet owner’s preferences for Pet Health Insurance policies. Our results indicate that pet insurance premium, reimbursement level, unlimited benefits and wellness included in pet health insurance plan have significant effects on pet owners' purchase decisions.
    Keywords: Health Economics and Policy, Institutional and Behavioral Economics,
    Date: 2016
  5. By: Congressional Budget Office
    Abstract: CBO and the staff of the Joint Committee on Taxation project that the federal subsidies, taxes, and penalties associated with health insurance coverage for the noninstitutionalized population under age 65 will result in a net subsidy from the federal government of $660 billion, or 3.6 percent of GDP, in 2016. For the entire 2017–2026 period, the projected net subsidy is $8.9 trillion.
    JEL: H30 I13 I18
    Date: 2016–03–24
  6. By: Anne Corcos; François Pannequin; Claude Montmarquette
    Abstract: This study develops an experimental analysis addressing the premium sensitivity of the demand for insurance accounting for risk attitudes, including risk-loving. Our contribution disentangles the conditional demand (the non-null demand for insurance) from the propensity to buy insurance. Our research shows that the contraction of the global demand for insurance induced by the raise in unit prices and fixed cost is primarily due to policyholders exiting the insurance market rather than reducing their levels of coverage. However, contrary to the theoretical predictions, an increase in the fixed cost has effects only on the risk lovers’ behavior. The stability of the conditional demand is robust to changes in insurance contracts and individuals’risk attitude. These results suggest that the decision about insurance may boil down to an “all or nothing” choice. In line with the theory, risk lovers express a lower global demand for insurance than risk-averse subjects and are the first to leave the insurance market when the premium (unit price or fixed cost) is prohibitive. Implications regarding public and economic policies are discussed. As a by-product, our experimental design enables to test and reject the assumption of inferiority of the risk averters’ demand for insurance.
    Keywords: demand for insurance, conditional demand, propensity to buy insurance, risk attitude, two-part tariff, experimental study,
    JEL: C91 D81
    Date: 2016–05–06
  7. By: Jacqueline F. Kauff; Elizabeth Clary; Kristin Sue Lupfer; Pamela J. Fischer
    Abstract: Accessing Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) is challenging for people experiencing or at risk of homelessness.
    Keywords: SOAR, SSI, SSDI
    JEL: I J
  8. By: Congressional Budget Office
    Abstract: Premiums for private health insurance, which are high and rising, are affected by various federal subsidies and regulations. In 2016, the federal government will subsidize most premiums, at a cost of roughly $300 billion.
    JEL: I13 I18
    Date: 2016–02–11
  9. By: Congressional Budget Office
    Abstract: Premiums for private health insurance, which are high and rising, are affected by various federal subsidies and regulations. In 2016, the federal government will subsidize most premiums, at a cost of roughly $300 billion.
    JEL: I13 I18
    Date: 2016–02–11
  10. By: Alicia H. Munnell; Jean-Pierre Aubry
    Abstract: Most analyses of public pensions focus on states and cities. Less has been written about the role of counties, which are significant public service providers in some states. This brief sheds light on pension activity at the county level by documenting the costs, funded status, and unfunded liabilities to determine whether counties should regularly be included in analyses of state and local pensions. The discussion proceeds as follows. The first section describes the nature and role of counties in the state government structure. The second section takes a closer look at states where counties administer their own pension plans as opposed to participating in state-administered plans, with a special emphasis on Maryland, Virginia, and California. The third section focuses on pension expense as a percentage of revenues for counties and compares this ratio to that of states and cities. The fourth section reports the funded status of pension plans administered by counties and reports counties’ total unfunded liabilities stemming from both their own plans and the state plans in which they participate. The final section concludes that the importance of counties varies significantly across states but, in the aggregate, counties account for only 12 percent of total unfunded pension liabilities. That said, in states such as Maryland, Virginia, and California, discussing the pension landscape without considering counties would provide a very misleading picture.
    Date: 2016–05
  11. By: Xiaotong Niu; Melinda Buntin; Joyce Manchester
    Abstract: The aging of the population exerts upward pressure on federal spending for health care, especially Medicare, as both the number and average age of elderly beneficiaries increase. Total Medicare expenditures may also be affected by changes in relative per-beneficiary spending for beneficiaries of different ages as the population ages. In this paper, we use the Master Beneficiary Summary File to estimate spending per beneficiary for the elderly population (people between ages 65 and 105) enrolled in the traditional fee-for-service (FFS) Medicare program between 1999 and 2012. Over that period,
    JEL: I10 I13 I18 H51
    Date: 2015–11–23
  12. By: Marco Cozzi (University of Victoria); Giulio Fella (Queen Mary University of London)
    Abstract: This paper is a quantitative, equilibrium study of the insurance role of severance pay when workers face displacement risk and markets are incomplete. A key feature of our model is that, in line with an established empirical literature, job displacement entails a persistent fall in earnings upon re-employment due to the loss of tenure. The model is solved numerically and calibrated to the US economy. In contrast to previous studies that have analyzed severance payments in the absence of persistent earning losses, we find that the welfare gains from the insurance against job displacement afforded by severance pay are sizable.
    Keywords: Severance payments, Incomplete markets, Welfare
    JEL: E24 D52 D58 J65
    Date: 2016–05

This nep-ias issue is ©2016 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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.