nep-ias New Economics Papers
on Insurance Economics
Issue of 2017‒08‒13
fourteen papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Social Insurance and Health By Ziebarth, Nicolas R.
  2. Promoting Access in Medicaid and CHIP Managed Care: A Toolkit for Ensuring Provider Network Adequacy and Service Availability By Debra J. Lipson; Jenna Libersky; Katharine Bradley; Corinne Lewis; Allison Wishon Siegwarth; Rebecca Lester
  3. Preventing Improper Billing of Medicare-Medicaid Enrollees in Managed Care: Strategies for States and Dual Eligible Special Needs Plans By Claire Postman; James Verdier
  4. Survival Ambiguity and Welfare By Frank N. Caliendo; Aspen Gorry; Sita Slavov
  5. Bismarck's Health Insurance and the Mortality Decline By Bauernschuster, Stefan; Driva, Anastasia; Hornung, Erik
  6. Social Insurance Reform and Labor Market Outcomes in Sub-Saharan Africa: Evidence from Ethiopia By Shiferaw, Admasu; Bedi, Arjun S.; Söderbom, Mans; Alemu, Getnet
  7. The Effects of PACE on Medicare and Medicaid Expenditures By Leslie Foster; Robert Schmitz; Peter Kemper; Amy Zambrowski; Mei-Ling Mason; Matthew Jacobus; Jill Gurvey; Jeffrey Holt
  8. Improving automobile insurance ratemaking using telematics: incorporating mileage and driver behaviour data By Mercedes Ayuso; Montserrat Guillén; Jens Perch Nielsen
  9. Incentivizing efficient utilization without reducing access: The case against cost-sharing in insurance By Fels, Markus Peter
  10. Immigrant Children’s Access to Public Health Insurance after CHIPRA-2009 By Mahmud, Mir
  11. Provider Experiences with Chronic Care Management (CCM) Services and Fees: A Qualitative Research Study By Ann O’Malley; Rumin Sarwar; Rosalind Keith; Patrick Balke; Sai Ma; Nancy McCall
  12. Financial option insurance By Qi-Wen Wang; Jian-Jun Shu
  13. Taking the CON out of Pennsylvania: Did Hip and Knee Replacement Patients Benefit? By Averett, Susan L.; Terrizzi, Sabrina; Wang, Yang
  14. New Data Available from the Transformed Medicaid Statistical Information System (T-MSIS) (In Focus Brief) By David K. Baugh; Carol V. Irvin

  1. By: Ziebarth, Nicolas R. (Cornell University)
    Abstract: This chapter reviews the existing empirical evidence on how social insurance affects health. Social insurance encompasses programs primarily designed to insure against health risks, such as health insurance, sick leave insurance, accident insurance, long-term care insurance and disability insurance; and programs that insure against other risks, such as unemployment insurance, pension insurance and country-specific social insurance. These insurance systems exist in almost all developed countries around the world. This chapter discusses the state-of-the art evidence on each of these social insurance systems, briefly reviews the empirical methods for identifying causal effects, and examines possible limitations to these methods. The findings reveal robust and rich evidence on first-stage behavioral responses ("moral hazard") to changes in insurance coverage. Surprisingly, evidence on how changes in coverage impact beneficiaries' health is scant and inconclusive. This lack of identified causal health effects is directly related to limitations on how human health is typically measured, limitations on the empirical approaches and a paucity of administrative panel data spanning long-time horizons. Future research must be conducted to fill these gaps. Of particular importance is evidence on how these social insurance systems interact and affect human health over the lifecycle and in the long-run.
    Keywords: social insurance, health, causal effects, microeconometrics, reduced-form methods, structural methods
    JEL: H1 H5 I1 J2
    Date: 2017–07
  2. By: Debra J. Lipson; Jenna Libersky; Katharine Bradley; Corinne Lewis; Allison Wishon Siegwarth; Rebecca Lester
    Abstract: In a project for the Centers for Medicare & Medicaid Services Center for Medicaid and CHIP Services, Mathematica developed a toolkit to assist states in developing their network adequacy and service availability standards for Medicaid and CHIP managed care organizations (MCOs).
    Keywords: Medicaid, CHIP, Managed care, Network Adequacy, Service Availability
    JEL: I
  3. By: Claire Postman; James Verdier
    Abstract: This brief describes the ongoing problem of improper billing of protected dually eligible beneficiaries for Medicare cost-sharing and describes steps states and health plans can take to address it.
    Keywords: balance billing , dual D-SNP , cost sharing
    JEL: I
  4. By: Frank N. Caliendo; Aspen Gorry; Sita Slavov
    Abstract: Nearly all life-cycle models adopt Yaari's (1965) assumption that individuals know the survival probabilities that they face. Given that an individual's exact survival probabilities are likely unknown, we explore the implications of relaxing this assumption. If there is no annuity market, then the welfare cost of survival ambiguity is large and regressive. Individuals would pay as much as 1% of total lifetime consumption for immediate resolution of ambiguity and the bottom income quintile is 4 times worse off than the top quintile. Alternatively, with the availability of competitive annuity contracts, survival ambiguity is welfare improving because it allows competitive insurance companies to pool risk across survival types. Even though Social Security and annuities share some properties, Social Security does not help to hedge survival ambiguity.
    JEL: D80 D91 H55
    Date: 2017–08
  5. By: Bauernschuster, Stefan; Driva, Anastasia; Hornung, Erik
    Abstract: We investigate the impact on mortality of the world's first compulsory health insurance, established by Otto von Bismarck, Chancellor of the German Empire, in 1884. Employing a multi-layered empirical setup, we draw on international comparisons and difference-in-differences strategies using Prussian administrative panel data to exploit differences in eligibility for insurance across occupations. All approaches yield a consistent pattern suggesting that Bismarck's Health Insurance generated a significant mortality reduction. The results are largely driven by a decline of deaths from infectious diseases. We present prima facie evidence that diffusion of new hygiene knowledge through physicians was an important channel.
    Keywords: demographic transition; Health Insurance; Mortality; Prussian Economic History
    JEL: I13 I18 J11 N33
    Date: 2017–08
  6. By: Shiferaw, Admasu (College of William and Mary); Bedi, Arjun S. (ISS, Erasmus University Rotterdam); Söderbom, Mans (University of Gothenburg); Alemu, Getnet (University of Addis Ababa, Ethiopia)
    Abstract: This paper examines the labor market implications of a mandatory social insurance scheme introduced in Ethiopia in 2011 for private sector employees in the formal sector. We use firm-level panel data and exploit differences in pre-reform pension plans across firms to identify the effects of the reform. We find no evidence of employers fully shifting the cost of pension benefits to workers in the form of lower wages. In fact the reform seems to be associated with an increase in real wage rates particularly among large firms. Firm-level employment declined after the reform with a greater contraction among firms without pre-reform provident funds and firms that were initially small. The composition of the workforce also shifted in favor of skilled workers although this effect may not be attributed entirely to the pension reform. We also find an increase in firm-level investment, capital per worker, and labor productivity.
    Keywords: social insurance, pension reform, labor markets, Ethiopia
    JEL: H55 J2 J3
    Date: 2017–07
  7. By: Leslie Foster; Robert Schmitz; Peter Kemper; Amy Zambrowski; Mei-Ling Mason; Matthew Jacobus; Jill Gurvey; Jeffrey Holt
    Abstract: The Centers for Medicare & Medicaid Services and state governments are increasingly interested in moving states’ long-term care systems away from reliance on institutional care and toward the development of more community-based services.
    Keywords: PACE , Medicare , Medicaid , Health
    JEL: I
  8. By: Mercedes Ayuso (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); Montserrat Guillén (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); Jens Perch Nielsen (Cass Business School, City University)
    Abstract: We show how data collected from a GPS device can be incorporated in motor insurance ratemaking. The calculation of premium rates based upon driver behaviour represents an opportunity for the insurance sector. Our approach is based on count data regression models for frequency, where exposure is driven by the distance travelled and additional parameters that capture characteristics of automobile usage and which may affect claiming behaviour. We propose implementing a classical frequency model that is updated with telemetrics information. We illustrate the method using real data from usage-based insurance policies. Results show that not only the distance travelled by the driver, but also driver habits, significantly influence the expected number of accidents and, hence, the cost of insurance coverage. This paper provides a methodology including a transition pricing transferring knowledge and experience that the company already had before the telematics data arrived to the new world including telematics information.
    Keywords: tariff, premium calculation, pay-as-you-drive insurance, count data models
    Date: 2017–07
  9. By: Fels, Markus Peter
    Abstract: Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations - consumer mistakes and limited access - to assess the welfare implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel inefficiencies by limiting access. An alternative design, relying on bonuses, has no such side effects and achieves the same incentivization.
    Keywords: Moral Hazard,Limited Access,Cost-Sharing,Insurance Rebates
    JEL: D82 I13 I14
    Date: 2017
  10. By: Mahmud, Mir
    Abstract: Although Immigrant children represent approximately 3 percent of total U.S. child population, they remain the most vulnerable group in terms of access to public health insurance since the enactment of the “five-year-ban” for legal immigrants in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Children Health Insurance Reauthorization Act (CHIPRA) of 2009 provided states an option to receive federal funds to expand eligibility for immigrant children regardless of their length of residency. In this paper, we utilize the cross-state variation in policy environment before and after the adoption of CHIPRA to compare the differences in access to public health insurance among the low-income immigrant children. We find that adoption immigrant child option of CHIPRA has resulted 8 percentage points increase in health coverage for the target group, almost entirely contributed by equal increase in coverage through public health insurance. Our measure of estimated treatment effect is lower than what existing literature reports. We attribute the difference to the existing state-funded programs to support immigrant children among majority of the CHIPRA states. Increase in coverage entirely comes from the ranks of previously uninsured children; no evidence of crowding out from the private insurance was found. We also verify the lack of crowding out by estimating the labor market response among mothers of immigrant children.
    Keywords: Key Words: Health Insurance, Medicaid, Immigrants
    JEL: I1 I18
    Date: 2016–11–01
  11. By: Ann O’Malley; Rumin Sarwar; Rosalind Keith; Patrick Balke; Sai Ma; Nancy McCall
    Abstract: This article summarizes results from a qualitative research study of provider experience with the Chronic Care Management (CCM) payment policy, which reimburses providers for CCM activities for Medicare beneficiaries occurring outside of office visits.
    Keywords: chronic care management, providers, Medicare, payment
    JEL: I
  12. By: Qi-Wen Wang; Jian-Jun Shu
    Abstract: The option is a financial derivative, which is regularly employed in reducing the risk of its underlying securities. However, investing in option is still risky. Such risk becomes much severer for speculators who utilize option as a means of leverage to increase their potential returns. In order to mitigate risk on their positions, the rudimentary concept of financial option insurance is introduced into practice. Two starkly-dissimilar concepts of insurance and financial option are integrated into the formation of financial option insurance. The proposed financial product insures investors option premiums when misfortune befalls on them. As a trade-off, they are likely to sacrifice a limited portion of their potential profits. The loopholes of prevailing financial market are addressed and the void is filled by introducing a stable three-entity framework. Moreover, a specifically designed mathematical model is proposed. It consists of two portions: the business strategy of matching and a verification-and-modification process. The proposed model enables the option investors with calls and puts of different moneyness to be protected by the issued option insurance. Meanwhile, it minimizes the exposure of option insurers position to any potential losses.
    Date: 2017–08
  13. By: Averett, Susan L. (Lafayette College); Terrizzi, Sabrina (Moravian College); Wang, Yang (University of Wisconsin-Madison)
    Abstract: Policymakers and the general public have expressed increasing concern over rising health care costs. The Certificate-of-Need (CON) programs began at the federal level in 1974 to stem the increase in costs by limiting hospital expansion and acquisition of equipment. The federal requirement for CON programs ended in 1987; however, 37 states and DC still maintain various forms of CON programs. We examine the effect of the expiration of Pennsylvania's CON law on indicators of quality and cost of health care for patients undergoing hip and knee replacement surgery. We use the standard difference-in-differences method and the Synthetic Control method. Our preferred method indicates that the expiration had no statistically significant effect on our various measures of quality and cost.
    Keywords: certificate of need, knee and hip replacement, health care, cost, quality
    JEL: I18 I10
    Date: 2017–07
  14. By: David K. Baugh; Carol V. Irvin
    Abstract: This fact sheet summarizes the new Medicaid data captured under T-MSIS.
    Keywords: Medicaid data, T-MSIS, CHIP
    JEL: I

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