nep-ias New Economics Papers
on Insurance Economics
Issue of 2018‒06‒18
fifteen papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Evaluation of the Comprehensive Primary Care Initiative: Fourth Annual Report By Deborah Peikes; Grace Anglin; Stacy Dale; Erin Fries Taylor; Ann O'Malley; Arkadipta Ghosh; Kaylyn Swankoski; Jesse Crosson; Rosalind Keith; Anne Mutti; Sheila Hoag; Pragya Singh; Ha Tu; Thomas Grannemann; Mariel Finucane; Aparajita Zutshi; Lauren Vollmer; Randall Brown
  2. Optimal Progressive Income Taxation in a Bewley-Grossman Framework By Juergen Jung; Chung Tran
  3. Welfare Implications of Proprietary Data Collection: An Application to Telematics in Auto Insurance By Imke Reimers; Benjamin R. Shiller
  4. Revisiting the Effects of Unemployment Insurance Extensions on Unemployment: A Measurement Error-Corrected Regression Discontinuity Approach By Dieterle, Steven G.; Bartalotti, Otávio; Brummet, Quentin
  5. The role of zakat in the provision of social protection: a comparison between Jordan, Palestine and Sudan By Charlotte Bilo; Anna Carolina Machado
  6. Deposit Inflows and Outflows in Failing Banks: The Role of Deposit Insurance By Christopher Martin; Manju Puri; Alexander Ufier
  7. Does sanctioning disabled claimants of unemployment insurance increase labour market inactivity? An analysis of 346 British local authorities between 2009 and 2014 By Reeves, Aaron
  8. The Recent Rise of Labor Force Participation of Older Workers in Sweden By Lisa Laun; Mårten Palme
  9. A comparative analysis of the effects of unemployment insurance savings accounts on the labour market By Ana Luiza Neves de Holanda Barbosa; Miguel Nathan Foguel; Charlotte Bilo
  10. How Much Does Health Insurance Cost? Comparison of Premiums in Administrative and Survey Data By Jeff Larrimore; David Splinter
  11. “The transition towards semi-autonomous vehicle insurance: the contribution of usage-based data” By Montserrat Guillen; Ana M. Pérez-Marín
  12. Does the Framing of Patient Cost-Sharing Incentives Matter? The Effects of Deductibles vs. No-Claim Refunds By Hayen, Arthur P.; Klein, Tobias J.; Salm, Martin
  13. The impact of revision for coinsurance rate for elderly on healthcare resource utilization: a pilot study using interrupted time series analysis of employee health insurance claims data By Nishi, Takumi
  14. “Exposure to risk increases the excess of zero accident claims frequency in automobile insurance” By Montserrat Guillen; Ana M. Pérez-Marín; Mercedes Ayuso; Jens Perch Nielsen
  15. The Comprehensive Primary Care Initiative: Effects on Spending, Quality, Patients, and Physicians By Deborah Peikes; Stacy Dale; Arkadipta Ghosh; Erin Fries Taylor; Kaylyn Swankoski; Ann S. O'Malley; Timothy J. Day; Nancy Duda; Pragya Singh; Grace Anglin; Laura L. Sessums; Randall S. Brown

  1. By: Deborah Peikes; Grace Anglin; Stacy Dale; Erin Fries Taylor; Ann O'Malley; Arkadipta Ghosh; Kaylyn Swankoski; Jesse Crosson; Rosalind Keith; Anne Mutti; Sheila Hoag; Pragya Singh; Ha Tu; Thomas Grannemann; Mariel Finucane; Aparajita Zutshi; Lauren Vollmer; Randall Brown
    Abstract: This is the fourth and final report evaluating the four-year Comprehensive Primary Care (CPC) initiative, which was launched by the Center for Medicare & Medicaid Innovation (CMMI) of the Centers for Medicare & Medicaid Services (CMS) to improve primary care delivery, health care quality, and patient experience, and lower costs.
    Keywords: primary care, Comprehensive Primary Care initiative, primary care transformation, patient-centered medical home
    JEL: I
  2. By: Juergen Jung; Chung Tran
    Abstract: We study optimal income tax progressivity in an environment where individuals are exposed to idiosyncratic income and health risks over the lifecycle. Our results, based on a calibration for the US economy, indicate that the presence of health risk combined with incomplete insurance markets amplies the social insurance role of progressive income taxes. The government is required to set higher optimal levels of tax progressivity in order to provide more social insurance for unhealthy low income individuals who have limited access to health insurance. The optimal progressive income tax system includes a tax break for income below $36; 400 and high marginal tax rates of over 50 percent for income above $200; 000: The tax progressivity (Suits) indexa Gini coecient for income tax contributions by incomeof the optimal tax system is around 0:53, compared to 0:17 in the benchmark tax system. Yet, the optimal tax system in our model is more progressive than the optimal tax systems in models abstracting from health risk (e.g., Conesa and Krueger (2006) and Heathcote, Storesletten and Violante (2017)). Importantly, the optimal level of tax progressivity is strongly aected by the design of the health insurance system. When health expenditure risk is reduced or removed from the model, the optimal tax system becomes less progressive and thus more similar to the optimal progressivity levels reported in the previous literature.
    Keywords: Health and income risks, Inequality, Social insurance, Tax progressivity, Suits index, Optimal taxation, General equilibrium.
    JEL: E62 H24 I13 D52
    Date: 2018–06
  3. By: Imke Reimers (Northeastern University); Benjamin R. Shiller (Brandeis University)
    Abstract: Concerns about anti-competitive effects of proprietary data collection have motivated recent European data portability laws. We investigate such concerns and search for evidence of direct benefits of data collection in the context of Pay How You Drive (PHYD) auto insurance, which offers tailored discounts to drivers monitored by telematics devices. We exploit the staggered entry of PHYD insurance across states and insurers in a difference-in-differences framework, and we replicate the main findings using state insurance regulations as instruments for entry timing. We find a meaningful impact of PHYD programs on fatal accidents, but we find no evidence of antitrust concerns.
    Keywords: Proprietary data, data portability, oligopoly, economic competition, asymmetric information
    JEL: D43 D82 L13 L40
    Date: 2018–01
  4. By: Dieterle, Steven G. (University of Edinburgh); Bartalotti, Otávio (Iowa State University); Brummet, Quentin (NORC at the University of Chicago)
    Abstract: We document two potential biases in recent analyses of UI benefit extensions using boundary-based identification: from using county-level aggregates and from across-border policy spillovers. To examine the first bias, we use a regression discontinuity (RD) approach that accounts for measurement error in county-level aggregates. Our results suggest much smaller effects than previous studies, casting doubt on the applicability of border-based designs. We then document substantial spillover effects of UI benefit duration in the form of across-border work patterns that are consistent with increased tightness in high benefit states, providing evidence against a dominant vacancy reduction response to UI extensions.
    Keywords: unemployment insurance, great recession, geographic regression discontinuity, policy spillover
    JEL: J61 J65
    Date: 2018–04
  5. By: Charlotte Bilo (IPC-IG); Anna Carolina Machado (IPC-IG)
    Abstract: "Zakat is one of the five pillars of Islam and considered a religious duty for wealthy people to support those in need. In Muslim-majority countries, zakat has a long tradition of providing income, goods for consumption and other basic services such as health care and education to poor and marginalised populations. A growing body of research has investigated the role of zakat in the provision of social protection and its importance as a poverty reduction mechanism. Although based on the same principles, countries vary significantly in the institutionalisation of zakat, ranging from obligatory to voluntary contributions. The institutional arrangements and benefit provision also differ greatly". (...)
    Keywords: Role, zakat, provision, social protection, comparison, Jordan, Palestine, Sudan
    Date: 2018–05
  6. By: Christopher Martin; Manju Puri; Alexander Ufier
    Abstract: Using unique, daily, account-level balances data we investigate deposit stability and the drivers of deposit outflows and inflows in a distressed bank. We observe an outflow of uninsured depositors from the bank following bad regulatory news. We find that government deposit guarantees, both regular deposit insurance and temporary deposit insurance measures, reduce the outflow of deposits. We also characterize which accounts are more stable (e.g., checking accounts and older accounts). We further provide important new evidence that, simultaneous with the run-off, gross funding inflows are large and of first-order impact — a result which is missed when looking at aggregated deposit data alone. Losses of uninsured deposits were largely offset with new insured deposits as the bank approached failure. We show our results hold more generally using a large sample of banks that faced regulatory action. Our results raise questions about depositor discipline, widely considered to be one of the key pillars of financial stability, raising the importance of other mechanisms of restricting bank risk taking, including prudent supervision.
    JEL: D12 G01 G21 G28
    Date: 2018–05
  7. By: Reeves, Aaron
    Abstract: Imposing financial penalties on claimants of unemployment insurance may incentivise labour market re-entry. However, sanctions may have differential effects depending on the work-readiness of the claimants. Here, I explore whether sanctioning disabled claimants is associated with greater labour market activity or inactivity among disabled people data on 346 British local authorities between 2009 and 2014. When the number of sanctioned disabled claimants rises (as a proportion of all claimants), the disability rate among economically inactive people becomes larger. There is no clear relationship between sanctioning disabled claimants and the employed disability rate.
    Keywords: conditionality; disability; labour market; sanctions; unemployment; unemployment insurance
    JEL: N0 R14 J01
    Date: 2017–06
  8. By: Lisa Laun; Mårten Palme
    Abstract: This paper studies the background to the increase in labor force participation of older workers in Sweden since 2000. In the first part, we study how the characteristics of the elderly have changed with respect to health, education level and work environment, as well as the impact of joint decision-making within the household. In the second part, we study the importance of institutional changes, including a major reform of the old-age pension system, introduction of tax credits for older workers, changes of the mandatory retirement age and stricter eligibility criteria in the disability insurance program. We find that the rise in labor force participation has coincided with improvements in health and educational attainment across birth cohorts as well as increased screening stringency in the disability insurance program.
    JEL: J26
    Date: 2018–05
  9. By: Ana Luiza Neves de Holanda Barbosa (IPC-IG); Miguel Nathan Foguel (IPC-IG); Charlotte Bilo (IPC-IG)
    Abstract: "The main objectives of passive employment policies are to guarantee a certain level of consumption and well-being and to improve the match between employers and workers. In most countries, the unemployment protection system comprises one or more of the following programmes: (i) unemployment insurance: a general fund which makes a certain number of payments calculated on the basis of the (average) previous salary; ii) severance pay: paid by the company after the dismissal of the employee, usually calculated based on the previous salary and the duration of employment in the company; and iii) unemployment individual savings accounts (UISAs): individual mandatory savings accumulated over the period of employment in the company and accessed by the employee after dismissal". (...)
    Keywords: Comparative, analysis, effects, unemployment, insurance, savings, accounts, labour, market
    Date: 2017–12
  10. By: Jeff Larrimore; David Splinter
    Abstract: Using newly available administrative data from the Internal Revenue Service, this paper studies the distribution of employer-sponsored health insurance premiums. Previous estimates, in contrast, were almost exclusively from household surveys. After correcting for coverage limitations of the IRS data, we find that average premiums for employer-sponsored plans are roughly $1000 higher in IRS records than in the Current Population Survey. The downward bias in the CPS is largely driven by underestimating of premiums among married workers and topcoding of high premiums.
    Keywords: CPS ; Employer Sponsored Health Insurance ; IRS data ; Topcoding
    JEL: I13 D3
    Date: 2018–05–04
  11. By: Montserrat Guillen (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain); Ana M. Pérez-Marín (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain)
    Abstract: The use of advanced driver assistance systems and the transition towards semi-autonomous vehicles are expected to contribute to a lower frequency of motor accidents and to have a significant impact for the automobile insurance industry, as rating methods must be revised to ensure that risks are correctly measured. We analyze telematics information and usagebased insurance research to identify the effect of driving patterns on the risk of accident. This is used as a starting point for addressing risk quantification and safety for vehicles than can control speed. Here we estimate the effect of excess speed on the risk of accidents with a real telematics data set. We show scenarios for a reduction of speed limit violations and the consequent decrease in the expected number of accident claims. If excess speed could be eliminated, then the expected number of accident claims could be reduced to half of its initial value, applying the average conditions of our data. As a consequence, insurance premiums also diminish.
    Keywords: Usage-based-insurance, ratemaking, semi-autonomous vehicles, advanced driver assistance systems. JEL classification:G22.
    Date: 2018–05
  12. By: Hayen, Arthur P. (Tilburg University); Klein, Tobias J. (Tilburg University); Salm, Martin (Tilburg University)
    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: patient cost-sharing, health insurance, framing, loss aversion
    JEL: I13 D91 H51
    Date: 2018–04
  13. By: Nishi, Takumi
    Abstract: Cost sharing, including copayment and coinsurance, is often used as a means of containing medical expenditure by reducing unnecessary or excessive use of health-care resources. Previous studies have reported the effects of reducing the coinsurance rate in Japan from 30% to 10% on demand for medical care among people aged 70 years. However, the coinsurance rate in Japan for individuals aged 70–74 years old has recently been increased from 10% to 20%. This study aimed to estimate the economic impact of coinsurance rate revision on health-care resource utilization using interrupted time-series analysis of employee health insurance claims data. I classified those who were born in FY 1944 and whose coinsurance rates decreased to 20% into the 10%-reduction group. It was found that the 10%-reduction group showed a lower increase of health-care utilization than the 20%-reduction group. However, no significant differences were observed in the overall and inpatient settings. The results of this study suggest that increasing the coinsurance rate among elderly people would reduce outpatient health-care resource utilization; however, it would not necessarily reduce overall health-care resource utilization.
    Keywords: Coinsurance; Healthcare resource utilization; Elderly
    JEL: I13 I18
    Date: 2018–06–06
  14. By: Montserrat Guillen (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain); Ana M. Pérez-Marín (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain); Mercedes Ayuso (Riskcenter- IREA and Department of Econometrics, University of Barcelona, Av. Diagonal, 690, 08034. Barcelona, Spain); Jens Perch Nielsen (Cass Business School, City, University of London, 106 Bunhill Row, London EC1Y 8TZ, United Kingdom.)
    Abstract: Most automobile insurance databases contain a large number of policy holders with zero claims. This high frequency of zeros may reflect the fact that some insureds make little use of their vehicle, or that they do not wish to make a claim for small accidents in order to avoid an increase in their premium, but it might also be because of good driving. We analyse information on exposure to risk and driving habits using telematics data from a Pay-as-you-Drive sample of insureds. We include distance travelled per year as part of an offset in a zero- inflated Poisson model to predict the excess of zeros. We show the existence of a learning effect for large values of distance travelled, so that longer driving should result in higher premium, but there should be a discount for drivers that accumulate longer distances over time due to the increased proportion of zero claims. We confirm that speed limit violations and driving in urban areas increase the expected number of accident claims. We discuss how telematics information can be used to design better insurance and to improve traffic safety.
    Keywords: Telematics, pay-as-you-drive, mileage. JEL classification:C35, C55, G22.
    Date: 2018–05
  15. By: Deborah Peikes; Stacy Dale; Arkadipta Ghosh; Erin Fries Taylor; Kaylyn Swankoski; Ann S. O'Malley; Timothy J. Day; Nancy Duda; Pragya Singh; Grace Anglin; Laura L. Sessums; Randall S. Brown
    Abstract: This study evaluates the effect of the Comprehensive Primary Care (CPC) initiative on care delivery and outcomes for fee-for-service Medicare beneficiaries over four years. CPC practices made improvements in care delivery, but did not reduce Medicare spending enough to cover care management fees.
    Keywords: primary care, comprehensive primary care initiative, primary care transformation
    JEL: I

This nep-ias issue is ©2018 by Soumitra K. Mallick. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.