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on Insurance Economics |
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Issue of 2017‒10‒01
thirteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Johanna Catherine Maclean; Keshar M. Ghimire; Lauren Hersch Nicholas |
| Abstract: | We study the effect of state medical marijuana laws (MMLs) on Social Security Disability Insurance (SSDI) and Workers' Compensation (WC) claiming. We use data on benefit claiming drawn from the 1990 to 2013 Current Population Survey coupled with a differences-in-differences design. We find that passage of an MML increases SSDI, but not WC, claiming on both the intensive and extensive margins. Post-MML the propensity to claim SSDI increases by 0.27 percentage points (9.9%) and SSDI benefits increase by 2.6%. We identify heterogeneity by age and the manner in which states regulate medical marijuana. Our findings suggest an unintended consequence of MMLs: increased reliance on costly social insurance programs among working age adults. |
| JEL: | I1 I12 I18 J22 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23862&r=ias |
| By: | Rudy Douven; Ron van der Heijden; Thomas McGuire; Frederik T. Schut |
| Abstract: | In health care systems with a competitive health insurance market, governments or other sponsors (e.g. employers) often subsidize premiums to encourage enrolment. These subsidies are typically independent of plan choice leaving the absolute premium differences in place so as not to distort consumer choice of plan. Such subsidies do, however, change the relative premium differences across plans, which, according to theories from behavioral economics, can affect choice. Consumers might be sensitive to differences relative to a reference premium (“relative thinking”). Furthermore, consumers might be particularly sensitive to a reference premium of zero (“zero-price effect”), a relevant range for some subsidized health insurance markets. This paper tests these ideas with two sources of evidence. We argue that observed equilibria in Germany and the U.S. Medicare Advantage markets are consistent with a powerful zero-price effects, resulting in an equilibrium focal pricing at zero. This contrasts with the Netherlands where equilibrium premiums are well above zero. In an empirical test using hypothetical questions in a web-based survey in these three countries, we also find evidence for both a relative thinking and a zero-price effect in the demand for health insurance. Our findings imply that well-designed subsidies can leverage relative thinking to increase demand elasticity for health plans. Creation of a powerful reference price (e.g., at zero), however, risks subverting price competition. |
| JEL: | I13 I18 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23846&r=ias |
| By: | Valerie Cheh; Leslie Foster |
| Abstract: | The Program of All-Inclusive Care for the Elderly (PACE) is a Medicare managed care benefit that addresses the problem of fragmentation of acute and long-term care financing and provision for frail Medicare beneficiaries. |
| Keywords: | PACE , Elderly Care , Health |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:828333c1cab741cabfba898852d74d43&r=ias |
| By: | Purvi Sevak; Matthew Kehn; Todd Honeycutt; Gina Livermore |
| Abstract: | This report presents findings from the Minnesota SGA Project demonstration. The demonstration implemented innovations designed to improve the employment outcomes of nonblind state vocational rehabilitation clients receiving Social Security Disability Insurance. |
| Keywords: | Social Security Disability Insurance, employment, disability, vocational rehabilitation, substantial gainful activity |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:4e67883bec6d4c29b0b0df5292df85e1&r=ias |
| By: | Matthew Kehn; Gina Livermore; Eric Morris |
| Abstract: | This brief summarizes findings from the Minnesota SGA Project demonstration. The demonstration implemented innovations designed to improve the employment outcomes of nonblind state vocational rehabilitation clients receiving Social Security Disability Insurance. |
| Keywords: | vocational rehabilitation, social security disability insurance, employment, substantial gainful activity |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:d3c9586267d74b7598d46741f5176b7d&r=ias |
| By: | Caroline S. Bennette; Anirban Basu; Scott D. Ramsey; Zachary Helms; Peter B. Bach |
| Abstract: | We estimated the average returns, in terms of patient survival, to the marginal innovations in oral chemotherapy market induced by Part D expansion of oral chemotherapy coverage for elderly individuals by mandating inclusion of “all or substantially all” oral anti-cancer medications on plans’ formularies. We exploited exogenous variation in the age of diagnosis for different cancer sites - and therefore the relative expansion in market size for different cancers under the Medicare’s prescription drug coverage – to isolate the effect of Part D on innovation and the health benefits that these innovative technologies provide. Using data from FDA and clinical studies from January 1994 to December 2016, we find that the approval rate for oral chemotherapies increased an additional 5.7% (95% CI: 1.7, 9.8) after implementation of Part D for every 1% increase in exposure to the Medicare market. In contrast, greater exposure to Medicare was associated with a smaller increase in the indication-specific survival gains reported in the drug’s label (3.2% [95% CI: 2.1, 4.3]) and 8.0% [95% CI: 6.1, 9.8] lower in absolute and relative gains, respectively). Similar trends were not observed for intravenously administered chemotherapy whose coverage was largely unaffected by Part D. These findings suggest that there could be diminishing returns to incentives for pharmaceutical innovation created by broad coverage mandates and that health policy tools, such as value–based pricing, may help maximize the health benefits provided by future pharmaceutical innovations. |
| JEL: | I11 I13 I18 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23842&r=ias |
| By: | Cahuc, Pierre (Ecole Polytechnique, Paris); Nevoux, Sandra (CREST (ENSAE)) |
| Abstract: | This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers' contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating. |
| Keywords: | short-time work, unemployment insurance, experience rating |
| JEL: | J63 J65 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11010&r=ias |
| By: | Lenel, Friederike (Leibniz University of Hannover); Steiner, Susan (Leibniz University of Hannover) |
| Abstract: | This paper investigates the crowding out of informal support among peers by the introduction of formal insurance. We show that the availability of insurance changes people's intrinsic motivation to support others. We report results from a lab-in-the-field experiment conducted in Cambodia. Half of the subjects face the risk to lose a large proportion of their endowment. It is varied whether they can purchase an insurance before the loss is determined. The other half of the subjects can transfer part of their endowment to those who lose. We find that significantly lower transfers are provided to subjects who had the option to purchase insurance but did not use this option than to subjects who did not have the insurance option available. We show that the reduction in transfers is not affected by whether subjects were informed about the possibility of informal support when making their insurance decision. Our findings indicate that the extent of crowding out may be larger than previously thought, because insurance does not only change economic incentives but also affects intrinsic motivations. |
| Keywords: | insurance, informal support, crowding-out, social preferences, Cambodia |
| JEL: | D03 C91 O12 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10986&r=ias |
| By: | Haelim Park Anderson; Gary Richardson; Brian S. Yang |
| Abstract: | In the Banking Acts of 1933 and 1935, the United States created the Federal Deposit Insurance Corporation, which ensured deposits in commercial banks up to $5,000. Congress capped the size of insured deposits so that small depositors would not run on banks, but large and informed depositors – such as firms and investors – would continue to monitor banks’ behavior. This essay asks how that insurance scheme influenced depositors’ reactions to news about the health of the economy and information on bank’s balance sheets. An answer arises from our treatment-and-control estimation strategy. When deposit insurance was created, banks with New York state charters accepted regular and preferred deposits. Preferred depositors received low, fixed interest rates, but when banks failed, received priority in repayment. Deposit-insurance legislation diminished differences between preferred and regular deposits by capping interest rates and protecting regular depositors from losses. We find that before deposit insurance, regular depositors reacted more to news about banks’ balance sheets and economic aggregates; while preferred depositors reacted less. After deposit insurance, this difference diminished, but did not disappear. The change in the behavior of one group relative to the other indicates that deposit insurance reduced depositor monitoring, although the continued reaction of depositors to some information suggests that, as intended, the legislation did not entirely eliminate depositor monitoring. |
| JEL: | E42 E65 G21 G28 N22 P34 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23828&r=ias |
| By: | Purvi Sevak; Frank Martin; Gina Livermore; Todd Honeycutt; Eric Morris |
| Abstract: | This report presents findings from the Kentucky SGA Project demonstration. The demonstration implemented innovations designed to improve the employment outcomes of nonblind state vocational rehabilitation clients receiving Social Security Disability Insurance. |
| Keywords: | Social Security Disability Insurance, employment, disability, vocational rehabilitation, substantial gainful activity |
| JEL: | I J |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:9c4c2567d68f48c2be3401137b2bb594&r=ias |
| By: | Chloe N. East; Sarah Miller; Marianne Page; Laura R. Wherry |
| Abstract: | We examine multi-generational impacts of positive in utero and early life health interventions. We focus on the 1980s Medicaid expansions, which targeted low-income pregnant women, and were adopted differently across states and over time. We use Vital Statistics Natality files to create unique data linking individuals’ in utero Medicaid exposure to the next generation’s health outcomes at birth. We find strong evidence that the health benefits associated with treated generations’ in utero access to Medicaid extend to later offspring in the form of higher average birth weight and decreased incidence of very low birth weight. Later childhood exposure to Medicaid does not lead to persistent health effects across generations. The return on investment is substantially larger than suggested by evaluations of the program that focus only on treated cohorts. |
| JEL: | I1 I13 I14 I18 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23810&r=ias |
| By: | Emma M. Steinberg; Doris Valenzuela-Araujo; Joseph S. Zickafoose; Edith Kieffer; Lisa Ross DeCamp |
| Abstract: | Providing safe and high-quality health care for children whose parents have limited English proficiency (LEP) remains challenging. |
| Keywords: | limited English proficiency, health care disparities, interpreter, Latino, qualitative research |
| JEL: | I |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:e58c0a5ffcdc40478a77e3a05d3066f0&r=ias |
| By: | Hernaes, Øystein (Institute for Social Research, Oslo) |
| Abstract: | I evaluate a program aimed at strictly enforcing a requirement that people on long-term sick leave be partly back at work unless explicitly defined as an exception. Employing the synthetic control method, I find that the reform reduced work-hours lost due to absenteeism by 12 % in the reform region compared to a comparison unit created by a weighted average of similar regions. The effect is driven by both increased part-time presence of temporary disabled workers and accelerated recovery. Musculoskeletal disorders was the diagnosis group declining the most. The findings imply large savings in social security expenditures. |
| Keywords: | absenteeism, disability, activation, forkfare |
| JEL: | I18 I38 J48 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10991&r=ias |