nep-ias New Economics Papers
on Insurance Economics
Issue of 2017‒01‒15
nine papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Impact Evaluation of Banana Insurance Program of the PCIC in the Davao Region By Deluna, Roperto Jr. S.; Hinlo, Jennifer E.; Ayala, Michael L.
  2. Health Financing for the Poor in the Philippines: Final Report By Cabalfin, Michael R.
  3. Evaluation of the Impact of the Agricultural Insurance Program of PCIC on Rice Producers in Region VI By Defiesta, Gay; Mediodia, Hanny John
  4. Health Insurance Costs and Employee Compensation: Evidence from the National Compensation Survey By Priyanka Anand
  5. Maybe "honor thy father and thy mother": uncertain family aid and the design of social long term care insurance By Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
  6. Social Protection in APEC: In Pursuit of Inclusive Growth By Cuenca, Janet S.
  7. Pricing insurance drawdown-type contracts with underlying L\'evy assets By Zbigniew Palmowski; Joanna Tumilewicz
  8. The Impact of Transitioning Stairstep Children from Separate CHIP to Medicaid on Use of Health Services: Evidence from Colorado and New York By Sean Orzol; Lindsey Leininger; Lauren Hula; Cara Orfield; Richard Chapman; Matthew Mleczko
  9. Impact Evaluation of the Agricultural Insurance Program of the Philippine Crop Insurance Corporation on Agricultural Producers in Central Visayas By Anzano, Corazon G.; Alvarez, Julian Thomas B.

  1. By: Deluna, Roperto Jr. S.; Hinlo, Jennifer E.; Ayala, Michael L.
    Abstract: Agricultural crop insurance is a risk management tool to counter shocks and risks in banana production. It is a mechanism for farmers to be protected from unexpected risks and a tool for them to recover from the shocks experienced. The Philippine Crop Insurance Corporation is mandated to provide insurance protection to the country’s agricultural producers, particularly the subsistence farmers, against natural disasters and other perils. This paper evaluated how agricultural insurance made an impact on banana growers in terms of managing risks and their well-being. The inputs, outputs, and outcomes relative to risk, agricultural investment, productivity, and access to credit are documented to provide options and strategies in improving the agricultural crop insurance in the country. Agricultural crop insurance at its present coverage level is not sufficient to create impact on stabilizing income of banana farmers hit by shocks. This could be attributed to low insurance coverage, which is only 55 percent of the production cost of banana. Without the subsidy of the government, and status quo on coverage and premium rate, crop insurance in the country will not be sustained in the case of banana. Agricultural insurance has not fully penetrated the whole banana industry yet because of the lack of information dissemination. Hence, educational programs to inform the farmers about the benefits of modern risk management schemes in banana should be prioritized because the major driver toward sustainable development of agriculture in the Philippines is to instill resiliency of farmers through agricultural crop insurance.
    Keywords: Philippines, disasters, Davao, Davao Region, impact evaluation, Philippine Crop Insurance Corporation, agricultural crop insurance, banana, resiliency
    Date: 2016
  2. By: Cabalfin, Michael R.
    Abstract: Indigent membership in PhilHealth has surged in recent years, driven by the nation-wide identification of the poor. However, the massive identification has led to the enrollment of more members than official poverty estimates, resulting in leakages in the government's social health insurance subsidy. The massive enrollment has been facilitated by the incremental revenues from the revised sin tax law. Subsidy for the poor now comprises over a third of the national health insurance fund, effectively subsidizing health-care services for other members, especially the informal sector. Hospitals also enroll the poor as well as the near poor in PhilHealth at point of care and may oversubscribe the poor given the higher reimbursement relative to the premium subsidy. The poor are covered by a No Balance Billing policy in which they are not liable to pay hospital fees over the case rate. Despite this, close to half of the poor still incur out-of-pocket expenses, especially for medication. Close to three-fourths of the poor are also covered by the Primary Care Benefit 2 Package, which pays for outpatient medicines for certain illnesses to prevent catastrophic conditions. Finally, close to 1 percent of the benefits for the poor is estimated to fall under the Z benefit package, which subsidizes catastrophic illnesses.
    Keywords: Philippines, poverty, PhilHealth, social protection, health insurance, vin, health-care services, Primary Care Benefit 2 Package, No Balance Billing, sin tax law
    Date: 2016
  3. By: Defiesta, Gay; Mediodia, Hanny John
    Abstract: Rice is the most important agricultural commodity in Western Visayas, being one of the top producers of rice in the country. Rice production, however, is a highly risky venture in disaster-prone Philippines. Majority of the rice farms in the region are small farm holders who are more vulnerable to crop damages and diseases. To reduce small farmers’ vulnerability, the government provides social insurance through the Philippine Crop Insurance Corporation (PCIC). Crop insurance is viewed as a risk management tool that can stabilize farmers' income and consumption after experiencing perils, hence a promising strategy to reduce poverty. With the substantial amount of public funds that goes to PCIC, it is important to know whether its services bring positive impacts to small-scale farmers. The results of the impact evaluation showed that crop insurance had a positive impact on rice farmers during the period of observation. It increased access to credit, smoothened consumption, and increased net income from rice production. The impact on income is particularly pronounced among smaller farms. It is recommended that PCIC should expand to small farm holders to maximize the benefits of the crop insurance program.
    Keywords: Philippines, agriculture, impact evaluation, rice production, rice farmers, crop insurance, Western Visayas, agricultural insurance
    Date: 2016
  4. By: Priyanka Anand
    Abstract: This paper examines the relationship between rising health insurance costs and employee compensation.
    Keywords: health insurance costs, employee compensation, national compensation survey
    JEL: I
  5. By: Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
    Abstract: We study the role and design of private and public insurance programs when informal care is uncertain. Children's degree of altruism is randomly distributed over some interval. Social insurance helps parents who receive a low level of care, but it comes at the cost of crowding out informal care. Crowding out occurs both at the intensive and the extensive margins. We consider three types of LTC policies: (i) a topping up (TU) scheme providing a transfer which is non exclusive and can be supplemented; (ii) an opting out (OO) scheme which is exclusive and cannot be topped up and (iii), a mixed policy combining these two schemes. TU will involve crowding out both at the intensive and the extensive margins, whereas OO will crowd out informal care solely at the extensive margin. However, OO is not necessarily the dominant policy as it may exacerbate crowding out at the extensive margin. The distortions of both policies can be mitigated by using an appropriately designed mixed policy.
    Keywords: long term care; opting out.; private insurance; public insurance; topping up; uncertain altruism
    JEL: H2 H5
    Date: 2017–01
  6. By: Cuenca, Janet S.
    Abstract: The paper seeks to take stock of some of the key APEC documents/reports relevant to social protection and safety net programs, and also of the experience of APEC member-economies, with special focus on the Philippines, in implementing social protection measures. In particular, it attempts to identify and analyze social protection issues and challenges within the APEC context. In addition, it aims to provide insights, policy guidelines, and recommendations to improve social protection.
    Keywords: Philippines, APEC, social assistance, social protection, social security, labor market policies, pension, social insurance programs, social safety nets
    Date: 2016
  7. By: Zbigniew Palmowski; Joanna Tumilewicz
    Abstract: In this paper we consider some insurance policies related with drawdown and drawup events of log-returns for an underlying asset modeled by a spectrally negative geometric L\'evy process. We consider four contracts among which three were introduced in Zhang et al. (2013) for a geometric Brownian motion. The first one is an insurance contract where protection buyer pays a constant premium until the drawdown of fixed size of log-returns occurs. In return he/she receives certain insured amount at the drawdown epoch. Next insurance contract provides protection from any specified drawdown with a drawup contingency. This contract expires early if certain fixed drawup event occurs prior to fixed drawdown. The last two contracts are extensions of the previous ones by additional cancellable feature which allows an investor to terminate the contract earlier. We focus on two problems: calculating the fair premium $p$ for the basic contracts and identifying the optimal stopping rule for the polices with cancellable feature. To do this we solve some two-sided exit problems related with the drawdown and the drawup of spectrally negative L\'evy processes which is of own scientific interest. We also heavily rely on a theory of optimal stopping.
    Date: 2017–01
  8. By: Sean Orzol; Lindsey Leininger; Lauren Hula; Cara Orfield; Richard Chapman; Matthew Mleczko
    Keywords: CHIP, Medicaid, health services, Colorado, New York
    JEL: I
  9. By: Anzano, Corazon G.; Alvarez, Julian Thomas B.
    Abstract: This study evaluates the impact of the agricultural insurance program on agricultural producers in Central Visayas (Region VII) on the premise that agricultural crop insurance is a potential risk-mitigating tool. Agricultural insurance, through the Philippine Crop Insurance Corporation (PCIC), is seen as a mechanism that can be used by farmers to manage risks and improve their well-being. The Cebu provincial government allocated PHP 8 million in 2015 and PHP 10 million in 2016 for agricultural insurance. The corn farmers need only to comply with the administrative requirements to enjoy the benefits of agricultural insurance. Data were gathered through on-site observation and a survey instrument designed by PIDS in collaboration with the regional partner universities. For Central Visayas, 510 corn farmers listed in either the PCIC client list or the RSBSA were randomly chosen from the municipalities in the region. They were categorized into three types corresponding to the treatment and control groups of the study. Findings showed that agricultural insurance has a positive and significant impact on incomes of corn farmers, particularly those with corn farms greater than 0.5 hectare. Six variables were found to have significant impacts to availment of agricultural insurance by corn farmers. These were membership in farmers’ organization, size of farmlands, educational attainment of the farmer, location of the farmer’s household relative to the PCIC office, status of land tenure, and access to community-level facilities. Given the importance of the agricultural sector and its positive impact to corn farmers in Central Visayas, what is important is to address how corn farmers can be motivated to avail themselves of agricultural insurance and enjoy its benefits.
    Keywords: Philippines, impact evaluation, Philippine Crop Insurance Corporation, agricultural crop insurance, corn, Central Visayas
    Date: 2016

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