nep-ias New Economics Papers
on Insurance Economics
Issue of 2018‒05‒28
ten papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Effects of the Affordable Care Act on Health Behaviors after Three Years By Courtemanche, Charles; Marton, James; Ukert, Benjamin; Yelowitz, Aaron; Zapata, Daniela
  2. The Effects of DACA on Health Insurance, Access to Care, and Health Outcomes By Giuntella, Osea; Lonsky, Jakub
  3. Arbeitsplätze und Beschäftigungswirkungen im und durch das System der Privaten Krankenversicherung (PKV): Kommentierter Literatur-Review unter besonderer Berücksichtigung von Transformationsmodellen zur Bürgerversicherung By Schulze Ehring, Frank
  4. Immigrant Responses to Social Insurance Generosity By Bratsberg, Bernt; Raaum, Oddbjørn; Røed, Knut
  5. How Do Financial Constraints Affect Product Pricing? Evidence from Weather and Life Insurance Premiums By Ge, Shan
  6. The rise of government-funded health insurance in India. By Patnaik, Ila; Roy, Shubho; Shah, Ajay
  7. Insurers as asset managers and systemic risk By Ellul, Andrew; Jotikasthira, Chotibhak; Kartasheva, Anastasia; Lundblad, Christian T.; Wagner, Wolf
  8. Insurance Activity and Economic Performance: Fresh Evidence from Asymmetric Panel Causality Tests By Abdulnasser Hatemi-J; Chi-Chuan Lee; Chien-Chiang Lee; Rangan Gupta
  9. Does the framing of patient cost-sharing incentives matter? The effects of deductibles vs. no-claim refunds By Hayen, Arthur; Klein, Tobias; Salm, Martin
  10. Status and Progress in Cross-Border Portability of Social Security Benefits By Holzmann, Robert; Wels, Jacques

  1. By: Courtemanche, Charles (Georgia State University); Marton, James (Georgia State University); Ukert, Benjamin (University of Pennsylvania); Yelowitz, Aaron (University of Kentucky); Zapata, Daniela (Impaq International)
    Abstract: This paper examines the impacts of the Affordable Care Act (ACA) – which substantially increased insurance coverage through regulations, mandates, subsidies, and Medicaid expansions – on behaviors related to future health risks after three years. Using data from the Behavioral Risk Factor Surveillance System and an identification strategy that leverages variation in pre-ACA uninsured rates and state Medicaid expansion decisions, we show that the ACA increased preventive care utilization along several dimensions, but also increased risky drinking. These results are driven by the private portions of the law, as opposed to the Medicaid expansion. We also conduct subsample analyses by income and age.
    Keywords: Affordable Care Act, health insurance, Medicaid, health behavior, obesity, smoking, drinking, preventive care, screening
    JEL: I12 I13 I18
    Date: 2018–04
  2. By: Giuntella, Osea (University of Pittsburgh); Lonsky, Jakub (University of Pittsburgh)
    Abstract: This paper studies the effects of the 2012 Deferred Action for Childhood Arrivals (DACA) initiative on health insurance coverage, access to care, health care use, and health outcomes. We exploit a difference-in-differences that relies on the discontinuity in program eligibility criteria. We find that DACA increased insurance coverage. In states that granted access to Medicaid, the increase was driven by an increase in public insurance take-up. Where public coverage was not available, DACA eligibility increased individually purchased insurance. Despite the increase in insurance coverage, there is no evidence of significant increases in health care use, although there is some evidence that DACA increased demand for mental health services. After 2012, DACA- eligible individuals were more likely to report a usual place of care and less likely to delay care because of financial restrictions. Finally, we find some evidence that DACA improved self-reported health, and reduced depression symptoms, indicators of stress and anxiety, and hypertension. These improvements are concentrated among individuals with income below the federal poverty level.
    Keywords: health insurance, DACA, immigration, health care, health
    JEL: I10 J15 J61
    Date: 2018–04
  3. By: Schulze Ehring, Frank
    Abstract: This paper offers a systematic literature review about jobs and related employment impacts in and by the system of private health insurance (Private Krankenversicherung, PKV). The available literature shows the varying evaluation of private health insurance’s relevance for labor policy depending on emphasis, perspective, methodology and delineation in use. The estimated employment impact of the private health insurance field as insurance carrier and as financier of health care services are complex. Therefore, the number of affected jobs of numerous transformation scenarios to a single-payer system which are discussed by political stakeholders would be substantial. Employment trade-offs in the private health insurance field as insurance carrier are explicitly regarded as unrealistic in current research literature. Neither the expansion of supplementary insurance business in the private health insurance nor employment creation in the statutory health insurance system seems expectable. Additionally, private health insurance companies might refuse to enter the single-payer system-market because of little prospect for success. That would parallel a “cold start” in an unknown and already fully occupied market. Employment impacts through a loss of funding for health care services could be compensated if the financing share of private patients doesn’t lead to a financial loss for health care service providers. In return, that would result in an increase of contribution rate by 1.5 contribution rate points as pointed out in the literature.
    Keywords: Arbeitsmarktpolitik; Arbeitsplätze; Bürgerversicherung; Private Krankenversicherung; Transformationsmodell; Beschäftigungswirkung
    JEL: I11 I13 I15 I18 J08 J21 J23
    Date: 2018
  4. By: Bratsberg, Bernt (Ragnar Frisch Centre for Economic Research); Raaum, Oddbjørn (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: Immigrants from low‐income source countries tend to be underrepresented in employment and overrepresented in social insurance programs. Based on administrative data from Norway, we examine how these gaps reflect systematic differences in the impacts of social insurance benefits on work incentives. Drawing on a benefit formula reform of the temporary disability insurance program, we identify behavioral employment and earnings responses to changes in benefits, and find that responses are significantly larger for immigrants. Among female immigrant program participants, earnings of the male spouse also drop in response to more generous benefits. We uncover stronger behavioral responses among natives with characteristics similar to those of immigrants.
    Keywords: immigrants, labor supply, social insurance
    JEL: H53 J15 J22
    Date: 2018–04
  5. By: Ge, Shan (Ohio State University)
    Abstract: I identify effects of financial constraints on firms' product pricing decisions, using a sample of insurance groups (conglomerates) that contain both life and P&C (property & casualty) subsidiaries. P&C subsidiaries' losses can tighten financial constraints for the life subsidiaries through internal capital markets. I present a model that predicts following P&C losses, premiums should fall for life policies that initially increase insurers' statutory capital, and rise for policies that initially decrease capital. Empirically, I find that P&C losses cause changes in life insurance premiums as my model predicts. The effects are concentrated in more financially constrained groups. Evidence also indicates that life subsidiaries increase capital transfers to P&C subsidiaries following larger P&C losses. These results hold when instrumenting for P&C losses using data on weather damages, implying that P&C losses do cause changes in life insurance premiums and internal capital transfers. My findings suggest that when financial constraints tighten, firms change product prices to relax the constraints, and how prices change depends on the initial impact of selling the products on firms' financial resources.
    JEL: G22 G28 G30
    Date: 2017–11
  6. By: Patnaik, Ila (National Institute of Public Finance and Policy); Roy, Shubho (National Institute of Public Finance and Policy); Shah, Ajay (National Institute of Public Finance and Policy)
    Abstract: India has experienced a remarkable proliferation of 48 Government Funded Health Insurance Schemes (GFHIS) from 1997 to 2018. We place the rise of this policy pathway in historical perspective. Under colonial rule, there was considerable importance placed upon public health as a local public good. After independence, the Bhore Committee build a paradigm of public sector health care, and the public health system degraded. In this environment, the political process faced a high disease burden coupled with a weak public health care system. This pressure led to the adoption of GFHIS as a convenient way forward. We identify four areas of concern in this new paradigm of Indian health policy: inefficient lack of focus upon public health, regulatory problems with private health care, weak regulation of health insurance companies, and fiscal risk.
    Date: 2018–05
  7. By: Ellul, Andrew; Jotikasthira, Chotibhak; Kartasheva, Anastasia; Lundblad, Christian T.; Wagner, Wolf
    Abstract: Financial intermediaries often provide guarantees that resemble out-of-the-money put options, exposing them to tail risk. Using the U.S. life insurance industry as a laboratory, we present a model in which variable annuity (VA) guarantees and associated hedging operate within the regulatory capital framework to create incentives for insurers to overweight illiquid bonds (“reach-for-yield”). We then calibrate the model to insurer-level data, and show that the VAwriting insurers’ collective allocation to illiquid bonds exacerbates system-wide fire sales in the event of negative asset shocks, plausibly erasing up to 20-70% of insurers’ equity capital. JEL Classification: G11, G12, G14, G18, G22
    Keywords: financial stability, insurance companies, inter-connectedness, systemic risk
    Date: 2018–05
  8. By: Abdulnasser Hatemi-J (Department of Economics and Finance, UAE University, Al Ain, United Arab Emirates); Chi-Chuan Lee (School of Management, Beijing Normal University Zhuhai, Zhuhai, China); Chien-Chiang Lee (Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa)
    Abstract: Insurance plays a fundamental role in any modern economy, but the literature has not accounted for the potential asymmetric causal impacts from the dynamic interaction between the insurance market and economic performance. This paper aims to fill this gap by studying the causal relationship between several measures of insurance per capita and real GDP per capita in the G7 countries over the period 1980-2014 via asymmetric panel causality tests. Our results show that insurance market activity and economic performance exhibit bidirectional causalities, but their direction, intensity, and significance are different due to distinct market situations. In general, insurance activity plays a passive role on economic performance, while economic performance has an aggressive role on insurance activity. These findings offer several useful insights for policy-makers and researchers.
    Keywords: Insurance market activity, GDP per capita, Asymmetric panel causality, G7 countries
    JEL: C33 G22 O16
    Date: 2018–05
  9. By: Hayen, Arthur; Klein, Tobias; Salm, Martin
    Abstract: In light of increasing health care expenditures, patient cost-sharing schemes have emerged as one of the main policy tools to reduce medical spending. We show that the effect of patient cost-sharing schemes on health care expenditures is not only determined by the economic incentives they provide, but also by the way these economic incentives are framed. Patients react to changes in economic incentives almost twice as strongly under a deductible policy than under a no-claims refund policy. Our preferred explanation is that individuals are loss-averse and respond differently to both schemes because they perceive deductible payments as a loss and no-claim refunds as a gain.
    Keywords: framing; Health Insurance; loss aversion.; Patient cost-sharing
    JEL: D91 H51 I13
    Date: 2018–05
  10. By: Holzmann, Robert (University of New South Wales); Wels, Jacques (University of Cambridge)
    Abstract: The importance of cross-border portability of social benefits is increasing in parallel with the rise in the absolute number of international migrants and their share of the world population, and perhaps more importantly, with the rising share of world population that for some part of their life is working and/or retiring abroad. This paper estimates how the rising stock of migrants is distributed over four key portability regimes: those with portability through bilateral social security arrangements (regime I); those with potential exportability of eligible benefits from abroad (regime II); documented workers with no access to national schemes but no contribution payment either (regime III); and undocumented workers with no access to any scheme (regime IV). Estimates for 2000 and 2013 are compared. The results indicate a modest but noticeable increase in the share of migrants under regime I, from 21.9 percent in 2000 to 23.3 percent in 2013. The biggest change occurred under regime III, which almost doubled to 9.4 percent. Regime II reduced by 3.0 percentage points but remains the dominant scheme (at 53.2 percent). The estimates suggest that the scope of regime IV (informality) reduced by 2.9 percentage points, accounting for 14.0 of all migrants in 2013. This trend is positive, but more will need to be done to progress on benefit portability.
    Keywords: labor mobility, retirement mobility, portability regimes, bilateral social security agreements, social benefits
    JEL: D69 H55 I19 J62
    Date: 2018–04

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