|
on Insurance Economics |
|
Issue of 2016‒11‒13
ten papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Bardey, David; Buitrago, Giancarlo |
| Abstract: | The aim of this article is to estimate the type of selection that exists in the voluntary health insurance market in Colombia where the compulsory coverage is implemented through a managed care competition. We build a panel database that combines individuals’ information from the Ministry of Health and a database provided by two private health insurers. We perform the correlation test for health expenditure and coverage. Following Fang et al. (2008), we condition the estimation on health controls that are available to the econometrician but not to insurers. In both cases we obtain a positive correlation, suggesting that adverse selection predominates. In order to rule out some moral hazard effects, we estimate the correlation between previous health service consumption and insurance purchase. The positive correlation obtained is robust to the inclusion of controls for diagnosis, suggesting that despite some risk selection strategies, health insurers are not protected from adverse selection. |
| Keywords: | Information asymmetry, Health insurance, Adverse Selection, Correlation test. |
| JEL: | D82 G22 I13 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31080&r=ias |
| By: | Pierre-Charles Pradier (Centre d'Economie de la Sorbonne & LabEx RéFi); Arnaud Chneiweiss (Fédération Française de l'Assurance) |
| Abstract: | The Solvency 2 package, which went on force on January 11, 2016, has had strong implications on the insurance companies' market conduct, consumer relation and solvency; an ongoing process with the FSB and the IAIS due to address systemic risk is also impacting systemic insurers. These milestones of insurance regulation are aimed at solving the social cost of the failure of financial institutions, in order to prevent future crisis. The paper at hand reviews the detail of these considerable reforms and show the consistence of the whole: prevention of systemic and microeconomic risk is first seen as prevention of regulatory arbitrage with the banking sector. This thorough legal package has but a cost, not only for every firm (cost of implementation of reforms, recurring cost of compliance including direct cost of funding supervisory authorities, indirect administrative costs and cost of regulatory capital) but also for the sector as a whole. We show that most of these costs have been played down so far, since the crisis prompted the authorities to appear tough on finance and set examples. Unfortunately, costs lead to market concentration and uniformization, which have significant systemic implications. To address this issue, finance future growth, advance market integration and development, we offer some insights on simplification and focusing of insurance regulation |
| Keywords: | insurance, financial regulation |
| JEL: | G22 G28 G01 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:16060&r=ias |
| By: | Laurie Felland; Lara Converse; Annie Doubleday; Paul Ginsburg |
| Abstract: | Since 2010, Orange County has largely recovered from the economic downturn and remains a relatively well-educated community with high rates of private insurance coverage overall. |
| Keywords: | Orange County, Market, Models, Provider Collaboration |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d80da2f535da46fb9d99edf270aa609e&r=ias |
| By: | Michael P. Keane (University of Oxford and University of South Wales); Susan Thorp (The University of Sydney) |
| Abstract: | We review evidence on decision making in complex choice situations – i.e., situations where there are many alternatives and/or where attributes of alternatives are difficult to understand. We focus on choices about health insurance, health care, and retirement planning, all of which are very important for the well-being of the elderly. Our review suggests that consumers in general, and the elderly in particular, have great difficulty making optimal choices in these areas. They often behave in ways that imply a high degree of “confusion,” such as (i) failure to understand key attributes of alternatives, or (ii) inadequate cognitive capacity to process payoff relevant information. We go on to discuss extensions to standard rational choice models that account for consumer confusion. These include allowing perceived attributes to depart from true attributes; the use of heuristics; and inattention or procrastination. Such departures from rationality can be moderated by cognitive ability, age etc. We hope that these new models may be useful in designing paternalistic interventions. |
| Keywords: | Aging; Life cycle; Health insurance; Health care; Pensions; Retirement plans; Discrete choice models |
| JEL: | I13 I11 J14 J32 H55 D14 D83 D84 D91 C35 |
| Date: | 2016–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:nuf:econwp:1610&r=ias |
| By: | Sorizo, Reena Beth; Densing, Filjhon; Tura, Regine; Balacy, Garnette Mae |
| Abstract: | This study was conducted to develop a model characterizing life insurance marketing as perceived by prospective clients. Survey method was used involving 200 professionals working in Digos City, Davao del Sur. Exploratory factor analysis was the primary statistical tool used to extract the latent constructs of life insurance, following a principal components analysis to assess the number of components. Results revealed that life insurance marketing is multidimensional and is a function of five dimensions, namely security and integrity, tangibles, credibility, customer service, and value-for-money. These five dimensions are the areas that typify a model that would define the type or quality of life insurance marketing that clients need from insurance companies. The study recommends that the model would be considered in their strategic marketing action plans to effectively capture their prospects. Moreover, testing the items of the developed framework is encouraged to establish its psychometric properties. |
| Keywords: | life insurance, marketing, service marketing, factor analysis, principal components analysis |
| JEL: | G22 G32 M3 M31 |
| Date: | 2016–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:74941&r=ias |
| By: | Haizhen Lin; Daniel W. Sacks |
| Abstract: | Nonlinear cost-sharing in health insurance encourages intertemporal substitution be- cause patients can reduce their out-of-pocket costs by concentrating spending in years when they hit the deductible. We test for such intertemporal substitution using data from the RAND Health Insurance Experiment, where people were randomly assigned either to a free care plan or to a cost-sharing plan which had coinsurance up to a maximum dollar expenditure (MDE). Hitting the MDE—leading to an effective price of zero—has a bigger effect on monthly health care spending and utilization than does being in free care, because people who hit the MDE face high future and past prices. As a result, we estimate that sensitivity to short-lasting price changes is about twice as large as sensitivity to long-lasting changes. These findings help reconcile conflicting estimates of the price elasticity of demand for health care, and suggest that high deductible health plans may be less effective than hoped in controlling health care spending. |
| JEL: | D12 G22 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22802&r=ias |
| By: | Eric J. Lammers; Catherine G. McLaughlin; Michael Barna |
| Abstract: | This study extends knowledge about EHRs' relationship with quality of care and utilization. |
| Keywords: | EHR, Hospital Admissions, Medicare Beneficiaries |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:9984c5acde3e4a8a9d74e5ba0910798e&r=ias |
| By: | Pierre-Charles Pradier (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, LABEX Refi - ESCP Europe); Arnaud Chneiweiss (Fédération Française de l'Assurance - FFA) |
| Abstract: | The Solvency 2 package, which went on force on January 11, 2016, has had strong implications on the insurance companies' market conduct, consumer relation and solvency; an ongoing process with the FSB and the IAIS due to address systemic risk is also impacting systemic insurers. These milestones of insurance regulation are aimed at solving the social cost of the failure of financial institutions, in order to prevent future crisis. The paper at hand reviews the detail of these considerable reforms and show the consistence of the whole: prevention of systemic and microeconomic risk is first seen as prevention of regulatory arbitrage with the banking sector. This thorough legal package has but a cost, not only for every firm (cost of implementation of reforms, recurring cost of compliance including direct cost of funding supervisory authorities, indirect administrative costs and cost of regulatory capital) but also for the sector as a whole. We show that most of these costs have been played down so far, since the crisis prompted the authorities to appear tough on finance and set examples. Unfortunately, costs lead to market concentration and uniformization, which have significant systemic implications. To address this issue, finance future growth, advance market integration and development, we offer some insights on simplification and focusing of insurance regulation. |
| Abstract: | Le paquet solvabilité 2 est entré en vigueur au premier janvier 2016, avec des conséquences importantes aussi bien en matière prudentielle, que pour la réédition de comptes et la protection du consommateur. De plus, le conseil de stabilité financière met au point avec l'IAIS un cadre spécifique pour les assureurs systémiques. L'objectif de ces réformes est de limiter le coût collectif des problèmes dans les institutions financières afin de prévenir les crises à venir. Nous examinons la cohérence de l'ensemble, en particulier au regard du risque systémique. Il apparaît alors que les coûts de la nouvelle régulation microprudentielle qui ont constamment et largement été sous-évalués, conduisent à une concentration et à une uniformisation des décisions dont les conséquences systémiques sont vraisemblablement néfastes. Nous terminons par des recommandations pour simplifier et surtout définir les objectifs de la régulation, en prenant garde aux risques particuliers de capture et de surenchère entre les autorités. |
| Keywords: | insurance,financial regulation,assurance,réglementation bancaire |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01390899&r=ias |
| By: | Laurie Felland |
| Abstract: | This paper focuses on collaborations among FQHCs, other safety-net providers and agencies, and some more mainstream providers (those that serve large populations of commercial and Medicare patients). |
| Keywords: | Federally Qualified Health Centers, FQHC, Medi-Cal |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:dc80dfb144e345bc8c6d919d06f0ff15&r=ias |
| By: | Powell, David; Pacula, Rosalie Liccardo; Taylor, Erin Audrey |
| Abstract: | Drug overdoses involving opioid analgesics have increased dramatically since 1999, representing one of the United States' top public health crises. Opioids have legitimate medical functions, but improving access may increase abuse rates even among those not prescribed the drugs given that opioids are frequently diverted to nonmedical use. We have little evidence about the causal relationship between increased medical access to opioids and spillovers resulting in abuse. We use the introduction of the Medicare Prescription Drug Benefit Program (Part D) as a large and differential shock to the geographic supply of opioids. Part D increased opioid utilization for the 65+ population, and we show that this increase in utilization led to significant growth in the overall supply of opioids in high elderly share states relative to low elderly share states. This relative expansion in opioid supply resulted in an escalation in opioid-related substance abuse treatment admissions and opioid-related mortality among the Medicare-ineligible population, implying meaningful spillovers to individuals who did not experience any change in prescription drug benefits. The evidence suggests that increased opioid supply is associated with economically-important levels of diversion for nonmedical purposes. Our estimates imply that a 10% increase in medical opioid distribution leads to a 7.4% increase in opioid-related deaths and a 14.1% increase in substance abuse treatment admission rates for the Medicare-ineligible population. |
| JEL: | I11 I12 I13 |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:ran:wpaper:1169&r=ias |