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on Insurance Economics |
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Issue of 2017‒04‒23
ten papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Pilny, Adam; Wübker, Ansgar; Ziebarth, Nicolas R. |
| Abstract: | To equalize differences in health plan premiums due to differences in risk pools, the German legislature introduced a simple Risk Adjustment Scheme (RAS) based on age, gender and disability status in 1994. In addition, effective 1996, consumers gained the freedom to choose among hundreds of existing health plans, across employers and state-borders. This paper (a) estimates RAS pass-through rates on premiums, financial reserves, and expenditures and assesses the overall impact on market price dispersion. Moreover, it (b) characterizes health plan switchers and their annual and cumulative switching rates over time. Our main findings are based on representative enrollee panel data linked to administrative RAS and health plan data. We show that sickness funds with bad risk pools and high pre-RAS premiums lowered their total premiums by 42 cents per additional euro allocated by the RAS. Consequently, post-RAS, health plan prices converged but not fully. Because switchers are more likely to be white collar, young and healthy, the new consumer choice resulted in more risk segregation and the amount of money redistributed by the RAS increased over time. |
| Keywords: | Employer-based health insurance,free health plan choice,risk adjustment,health plan switching,adverse selection: German sickness funds,SOEP |
| JEL: | D12 H51 I11 I13 I18 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:682&r=ias |
| By: | Virola, Romulo A. |
| Abstract: | The Philippine Crop Insurance Corporation (PCIC) started implementing the Agriculture Insurance Program (AIP) of the Philippines in 1981. Since then, the AIP has expanded its coverage from palay and corn to other crops and to other services including life and accidental death insurance to farmers and their families. As with most AIPs in other countries, the program provides premium subsidy that averaged 61 percent of gross premiums from 1981 to 2014 for palay and corn farmers. The paper finds that from 1987 to 2013, the penetration rate for the AIP has not been impressive: 4.5 percent for palay and 0.9 percent for corn; some regions have been underserved; and operating costs had been high with a historical average of 50 percent of premiums. Moreover, the AIP incurred an average loss ratio of 61 percent from 1981 to 2013 and the insurance coverage share of palay and corn farmers has shrunk over the years with the biggest share now going to Term Insurance Packages. While clear improvements have been incorporated in the program, such as the subsidized coverage of the Registry System for Basic Sectors in Agriculture beneficiaries and the streamlining of PCIC operations, the paper notes various areas of concern that need to be addressed toward improving the AIP: increasing penetration rate and expanding the coverage of marginalized farmers, rationalizing the subsidized coverage of even big-time farmers; extending coverage to underserved regions especially those prone to typhoons and flooding; introducing innovative insurance products that can reduce operating costs; reviewing the premium and premium subsidy structure including differentials across regions; irregular or unsustained actuarial inputs in assessing the actuarial solvency of the AIP; and the need for regulatory oversight on PCIC insurance operations. |
| Keywords: | Philippines, farmers, Philippine Crop Insurance Corporation, Agricultural Insurance Program, PCIC, premium rates, claims, loss ratio, penetration rate, insurance coverage |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2017-07&r=ias |
| By: | A. Mitchell Polinsky; Steven Shavell |
| Abstract: | The theory of insurance is considered here when an insured individual may be able to sue another party for the losses that the insured suffered—and thus when an insured has a potential source of compensation in addition to insurance coverage. Insurance policies reflect this possibility through so-called subrogation provisions that give insurers the right to step into the shoes of insureds and to bring suits against injurers. We show that subrogation provisions are a fundamental feature of optimal insurance contracts because they relieve litigation-related risks and result in lower premiums—financed by the litigation income of insurers. This income includes earnings from suits that insureds would not otherwise have brought. We also characterize optimal subrogation provisions in the presence of loading costs, moral hazard, and non-monetary losses. |
| JEL: | G22 K13 K41 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23303&r=ias |
| By: | Heinrich, Nils; Wübker, Ansgar; Wuckel, Christiane |
| Abstract: | Long waiting lines are a common feature and a major concern in many public health care delivery systems. The waiting lines are often characterized as inefficient, because they are a burden to patients without generating any gains for providers. There is an ongoing debate in Germany regarding the preferential treatment given to private health insurance (PHI) holders while statutory health insurance (SHI) holders face continuously increasing waiting times. In order to tackle this problem in the outpatient sector, in 2015 Germany introduced a reform that was aimed at providing SHI holders with appointments within an acceptable time frame. We exploited longitudinal experimental data to examine waiting times for six elective outpatient treatments in Germany and assessed the reform's impact on this issue. We found a sizeable difference in waiting times favoring private patients. For SHI holders, waiting times remained stable over time (27.5 days in 2014; 30.7 days in 2016; ? 3.2 days, p-value = 0.889), while PHI holders experienced a significant improvement (13.5 days in 2014; 7.8 days in 2016; ? 5.7 days, p-value = 0.002). The results indicate that there is an unequal access to elective outpatient treatment depending on the patient's insurance status. Our conclusion is that, the reform did not repair the existing inequalities. The gap has rather widened. |
| Keywords: | Waiting times,outpatient care,Germany,public health insurance,private health insurance |
| JEL: | I10 I11 I18 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:683&r=ias |
| By: | Jody Schimmel Hyde; Paul O'Leary |
| Abstract: | This paper examines the extent to which Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) beneficiaries who receive vocational rehabilitation (VR) services from a State Vocational Rehabilitation Agency (SVRA) go on to earn at a level high enough to forgo cash disability benefits. |
| Keywords: | Disability, beneficiary, Vocational Rehabilitation, return to work |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d6bf1150b82f4ef88a0c75a6fefbc7f0&r=ias |
| By: | James M. Poterba; Steven F. Venti; David A. Wise |
| Abstract: | Education is strongly related to participation in the Social Security Disability Insurance (DI) program. To explore this relationship, we describe the correlation between education and DI participation, and then explore how four factors related to education – health, wealth, occupation, and employment – feature in this correlation. We label these four factors “pathway” variables. We find that a large component of the relationship between education and DI participation – more than one-third for men, and over two-thirds for women – can be attributed to the correlation of education with health, and of health with DI receipt. We use data from the Health and Retirement Study for the 1992-2012 period to explore the corresponding roles for each of the pathway variables, and also to study how changes over time in these variables, such as the widening gap between the health status of those with high and low educational attainment, have affected DI participation. |
| JEL: | H53 H55 I26 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23307&r=ias |
| By: | Attar, Andrea; Mariotti, Thomas; Salanié, François |
| Abstract: | We show that a necessary and sufficient condition for entry to be unprofitable in markets with adverse selection is that that no buyer type be willing to trade at a price above the expected unit cost of serving those types who are weakly more eager to trade than her. We provide two applications of this result. First, we characterize cases in which market breakdown occurs, thereby generalizing the main result of Hendren (2013). Second, we characterize entry-proof tariffs on nonexclusive active markets, thereby generalizing the main result of Glosten (1994). Our analysis paves the way to new tests of adverse selection, notably besides the case of inactive markets studied by Hendren (2013). |
| Keywords: | Adverse Selection, Entry Proofness, Market Breakdown, Nonexclusivity. |
| JEL: | D43 D82 D86 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31582&r=ias |
| By: | Deborah Peikes; Grace Anglin; Erin Fries Taylor; Stacy Dale; Ann O'Malley; Arkadipta Ghosh; Kaylyn Swankoski; Lara Converse; Rosalind Keith; Mariel Finucane; Jesse Crosson; Anne Mutti; Thomas Grannemann; Aparajita Zutshi; Randall Brown |
| Abstract: | This article describes the impacts for Medicare fee-for-service beneficiaries’ cost, service use, quality of care, and patient experience of the first three years of the Comprehensive Primary Care (CPC) initiative. |
| Keywords: | Comprehensive Primary Care Initiative, advanced primary care, risk-stratified care management, patient centered medical home, Medicare fee for service, multi-payer, health information technology, propensity score matching |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:70714de1cb3d4620a5957f68dde5ce2e&r=ias |
| By: | Deborah Peikes; Grace Anglin; Erin Fries Taylor; Stacy Dale; Ann O'Malley; Arkadipta Ghosh; Kaylyn Swankoski; Lara Converse; Rosalind Keith; Mariel Finucane; Jesse Crosson; Anne Mutti; Thomas Grannemann; Aparajita Zutshi; Randall Brown |
| Abstract: | This article describes the impacts for Medicare fee-for-service beneficiaries’ cost, service use, quality of care, and patient experience of the first three years of the Comprehensive Primary Care (CPC) initiative. |
| Keywords: | Comprehensive Primary Care Initiative, advanced primary care, risk-stratified care management, patient centered medical home, Medicare fee for service, multi-payer, health information technology, propensity score matching |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:9047e20fb04b4bc99cdf309d8a2db56a&r=ias |
| By: | Ohinata, Asako; Picchio, Matteo |
| Abstract: | We analyse how the financial support for long-term elderly care affects the household’s propensity to save. Using the difference-in-differences estimator, we investigate the 2002 Scottish reform, which introduced free formal personal care for all the Scottish elderly aged 65 and above. We find that the policy reduced the household saving rate by 1:9 percentage points. This amounts to an annual reduction in the flow of saving of £503. Moreover, the estimated effect is heterogeneous across the age of the head of household. The largest effect is observed when the household head is in his/her 40s, with the reduction in the saving rate of 3:5 percentage points or £1; 213 per year. |
| Keywords: | Long-term elderly care,ageing,means tested financial support,saving rate,difference-in-differences |
| JEL: | C21 D14 I18 J14 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:43&r=ias |