nep-ias New Economics Papers
on Insurance Economics
Issue of 2016‒10‒02
nine papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Effects of the Affordable Care Act on Part-Time Employment: Early Evidence By Marcus Dillender; Carolyn Heinrich; Susan Houseman
  2. How Important is the T-Yield? An Analysis of Reforms to Organic Crop Insurance By Delbridge, Timothy A.; King, Robert P.
  3. CATalytic Insurance: The Case of Natural Disasters By Cordella, Tito; Yeyati, Eduardo Levy
  4. Reserve Balances, the Federal Funds Market and Arbitrage in the New Regulatory Framework By Ayelen Banegas; Manjola Tase
  5. What future for the health system? By André Grimaldi
  6. What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics By Brot-Goldberg, Zarek C.; Chandra, Amitabh; Handel, Benjamin R.; Kolstad, Jonathan T.
  7. Fertility and health insurance types in Germany By Robert Stelter
  8. Communication financière : le prochain défi des assureurs By Valérie Deppe; Pierre-Emmanuel Thérond
  9. Is American Pet Health Care (Also) Uniquely Inefficient? By Liran Einav; Amy Finkelstein; Atul Gupta

  1. By: Marcus Dillender (W.E. Upjohn Institute for Employment Research); Carolyn Heinrich (Vanderbilt University); Susan Houseman (W.E. Upjohn Institute for Employment Research)
    Abstract: The Affordable Care Act (ACA) requires employers with at least 50 full-time-equivalent employees to offer “affordable” health insurance to employees working 30 or more hours per week. If employers do not comply with the mandate, they may face substantial financial penalties. Employers can potentially circumvent the mandate by reducing weekly hours below the 30-hour threshold or by using other nonstandard employment arrangements (direct-hire temporaries, agency temporaries, small contractors, and independent contractors). We examine the effects of the ACA on short-hours, part-time employment. Using monthly CPS data, we estimate that the ACA resulted in an increase in low-hours, involuntary part-time employment of a half-million to a million workers in retail, accommodations, and food services, the sectors in which employers are most likely to reduce hours if they choose to circumvent the mandate, and also the sectors in which low-wage workers are most likely to be affected. Our empirical strategy uses as a control group Hawaii, which has had a more stringent employer health insurance mandate than that of the ACA for several decades. The findings are robust to placebo tests and alternative specifications.
    Keywords: Affordable Care Act, employer-sponsored health insurance, employer mandate, part-time employment, involuntary part-time employment
    JEL: I13 J23 J3
    Date: 2016–06
  2. By: Delbridge, Timothy A.; King, Robert P.
    Keywords: Agricultural and Food Policy, Production Economics, Risk and Uncertainty,
    Date: 2016–09
  3. By: Cordella, Tito (The World Bank); Yeyati, Eduardo Levy (Harvard University)
    Abstract: Why should developing countries buy expensive catastrophe (CAT) insurance? Abstracting from risk aversion or hedging motives, we find that insurance may have a catalytic role on external finance. Such effort is particularly strong in those low to middle income countries that face financial constraints when hit by a shock or in its anticipation. Insurance makes defaults less likely, thereby relaxing the country's borrowing constraint, and enhancing its access to capital markets. The presence of multilateral lenders that explicitly or implicitly provide inexpensive reconstruction funds in the aftermath of a natural disaster weakens but does not eliminate the demand for catalytic insurance.
    Date: 2015–09
  4. By: Ayelen Banegas; Manjola Tase
    Abstract: We study developments in reserve balances and the federal funds market in the context of two banking regulatory changes: the widening of the Federal Deposit Insurance Corporation (FDIC) assessment base and the introduction of the Basel III leverage ratio. Using a novel data set that includes FDIC fees and balance sheet data for depository institutions, we find that, as most foreign banks were not subject to the FDIC fee, they absorbed increasing amounts of reserve balances. Furthermore, foreign banks experienced positive and improving conditions for arbitraging between borrowing reserve balances in the federal funds market and earning interest on excess reserves by holding those reserves at the Federal Reserve Banks, contributing to an increase in federal funds borrowing by foreign banks relative to domestic banks. However, the implementation of the Basel III leverage ratio was associated with temporary declines in foreign bank federal funds borrowing at reporting dates.
    Keywords: Basel III ratios ; FDIC fees ; IOER arbitrage ; Reserve balances ; Federal funds market
    JEL: E49 E52 G28
    Date: 2016–09–01
  5. By: André Grimaldi (UPMC - Université Pierre et Marie Curie - Paris 6, CHU Pitié-Salpêtrière [APHP])
    Abstract: The French health system is facing a double challenge: epidemic of chronic diseases, and financial sustainability of the social security established in 1945. Our system is very good for caring acute illness, but is inadequate for the management of chronic diseases. And this, on four areas: prevention, medical model, organization, and ways of funding. The second challenge is the increase health spending reaching 11.6 % of GDP in 2013. Beyond the cost of new drugs, there is a problem of dual ways of refunding for each care: social security, and private health insurance. This duality is responsible for a very high cost of health management, up to 16 billion euros. The inevitable increase in health care spending, due to aging and medical progress, within a restricted budget, will lead to choose between two solutions: increase in privatization of routine care funding, social security refocusing on the poorest people and on the patients with the more severe and costly diseases, or separate the care supported by the community and the care relating to personal choice supported by private insurance. An intermediate solution would be to allow those who wish, to choose the social security as additional insurance, for an additional fee.
    Abstract: Le système de santé français est confronté à un double défi : l’augmentation épidémique du nombre de patients atteints de maladies chroniques, et la soutenabilité financière du système solidaire fondé en 1945. Or, notre système de santé, très bon pour les soins aigus, est mal adapté à la prise en charge des affections chroniques sur quatre plans : la prévention, le modèle médical, l’organisation, et le financement. Le 2e défi est celui de l’accroissement des dépenses de santé, représentant 11,6 % du Produit intérieur brut (PIB) en 2013. Au-delà de l’augmentation du coût des médicaments et des dispositifs médicaux innovants, se pose le problème de la dualité du mode de financement reposant, pour chaque acte, à la fois sur l’assurance maladie obligatoire et sur des assurances privées dites complémentaires. D’où un coût de gestion globalement très élevé, atteignant 16 milliards d’euros. L’augmentation des dépenses de santé, en raison du vieillissement de la population et des progrès médicaux, dans un contexte de budget contraint, va conduire, soit à une privatisation croissante du financement des soins courants, l’assurance maladie obligatoire prenant en charge les personnes les plus pauvres et les malades les plus graves, soit à la définition d’un panier de soins solidaire pris en charge par la Sécurité sociale, les soins hors panier de soins solidaire étant pris en charge par les assurances privées, non plus complémentaires, mais supplémentaires. Une proposition intermédiaire consisterait à permettre aux assurés qui le souhaitent de choisir, moyennant une cotisation supplémentaire, la Sécurité sociale comme assurance maladie complémentaire, en plus de son rôle d’assurance maladie obligatoire.
    Keywords: Chronic disease,integrated medicine,long term affections,health insurance,health expenditure,affections de longue durée,médecine intégrée,Maladies chroniques,assurances maladie,dépenses de santé
    Date: 2016
  6. By: Brot-Goldberg, Zarek C. (University of CA, Berkeley); Chandra, Amitabh (Harvard University); Handel, Benjamin R. (University of CA, Berkeley); Kolstad, Jonathan T. (University of CA, Berkeley)
    Abstract: Measuring consumer responsiveness to medical care prices is a central issue in health economics and a key ingredient in the optimal design and regulation of health insurance markets. We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which forced all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending ($100 million lower spending per year). We decompose this spending reduction into the components of (i) consumer price shopping (ii) quantity reductions (iii) quantity substitutions, finding that spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services). We then leverage the unique data environment to study how consumers respond to the complex structure of the high-deductible contract. We find that consumers respond heavily to spot prices at the time of care, and reduce their spending by 42% when under the deductible, conditional on their true expected end-of-year shadow price and their prior year end-of-year marginal price. In the first-year post plan change, 90% of all spending reductions occur in months that consumers began under the deductible, with 49% of all reductions coming for the ex ante sickest half of consumers under the deductible, despite the fact that these consumers have quite low shadow prices. There is no evidence of learning to respond to the true shadow price in the second year post-switch.
    Date: 2015–10
  7. By: Robert Stelter (Max Planck Institute for Demographic Research, UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and University of Rostock)
    Abstract: In this paper I study how different health insurance types in Germany alter the incentives to give birth. A stylized model illustrates that both the private and statutory health insurance can imply a higher number of births. While the family insurance in the latter clearly reduces the costs per child, income effects due to varying parental premia might operate in the opposite direction. If they are higher in the statutory health insurance, for instance, due to a selection of healthy individuals in the private health insurance, the latter might induce a higher number of births. Relying on data of the German Socio Economic Panel, I apply endogenous treatment effects models for count data to control for selection effects. Estimation results indicate that the private health insurance positively affects the number of births. The positive impact is robust across several alternative specifications.
    Keywords: Dual health insurance system; Fertility; Health insurance choice
    JEL: I13 J13
    Date: 2016–09–21
  8. By: Valérie Deppe (Galea & Associés); Pierre-Emmanuel Thérond (Galea & Associés, SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1)
    Abstract: La finalisation de la norme IFRS (phase II) contrats d'assurance et l'entrée en vigueur de Solvabilité II vont conduire à un changement de paradigme en termes de communication financière pour les assureurs. Au-delà des nouvelles obligations réglementaires en la matière, cette révolution résulte surtout de la nature des nouvelles informations à dévoiler et de l'évolution du secteur, induite notamment par Solvabilité II.
    Keywords: communication financière , assurance , IFRS , comptabilité
    Date: 2016
  9. By: Liran Einav; Amy Finkelstein; Atul Gupta
    Abstract: We document four similarities between American human healthcare and American pet care: (i) rapid growth in spending as a share of GDP over the last two decades; (ii) strong income-spending gradient; (iii) rapid growth in the employment of healthcare providers; and (iv) similar propensity for high spending at the end of life. We speculate about possible implications of these similar patterns in two sectors that share many common features but differ markedly in institutional features, such as the prevalence of insurance and of public sector involvement.
    JEL: H51 I1 I13
    Date: 2016–09

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