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on Insurance Economics |
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Issue of 2019‒01‒07
fifteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Laurence C. Baker; Kate Bundorf; Daniel Kessler |
| Abstract: | Despite a vast literature on the determinants of prescription opioid use, the role of health insurance plans has received little attention. We study how the form of Medicare beneficiaries’ drug coverage affects the volume of opioids they consume. We find that enrollment in Medicare Advantage, which integrates drug coverage with other medical benefits, significantly reduces beneficiaries’ likelihood of filling an opioid prescription, as compared to enrollment in a stand-alone drug plan. Approximately half of this effect was due to fewer fills from prescribers who write a very large number of opioid prescriptions. |
| JEL: | I11 I13 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25327&r=all |
| By: | Ariel Soto Caro; Roberto Herrera Cofre; Rodrigo Fuentes Solis |
| Abstract: | Background: Absenteism can generate important economic costs. Aim: To analyze the determinants of the time off work for sick leaves granted to workers of a regional health service. Material and Methods: Information about 2033 individuals, working at a health service, that were granted at least one sick leave during 2012, was analyzed. Personal identification was censored. Special emphasis was given to the type of health insurance system of the workers (public or private). Results: Workers ascribed to the Chilean public health insurance system (FONASA) had 11 days more off work than their counterparts ascribed to private health insurance systems. A higher amount of time off work was observed among older subjects and women. Conclusions: Age, gender and the type of health insurance system influence the number of day off work due to sick leaves. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1812.08091&r=all |
| By: | Costa-Font, Joan; Courbage, Christophe; Zweifel, Peter |
| Abstract: | Long-term care (LTC) is the largest insurable risk facing the elderly in most western societies. Paradoxically, institutional responses to the need to insure ex-ante (before the contingency occurs) the financial risks of needing LTC (by means of social and private insurance and self-insurance) exhibit limited development. In contrast, mechanisms to finance LTC ex-post continue to develop, primarily those supported by the public sector (by means of subsidies or tax deductions) and the family (by means of intergenerational transfers). Both ex-ante and ex-post types of financing mechanisms are found to be subject to shortcomings which give rise to dilemmas for public policy. Governments confront these dilemmas in different ways, causing a great deal of heterogeneity in the financing and provision of LTC services across Europe. |
| Keywords: | long-term care; old age dependency; long-term care insurance; subsidies; tax deductions for providing formal care |
| JEL: | E6 |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:61032&r=all |
| By: | Benjamin Hartung; Philip Jung; Moritz Kuhn |
| Abstract: | A key question in labor market research is how the unemployment insurance system affects unemployment rates and labor market dynamics. We revisit this old question studying the German Hartz reforms. On average, lower separation rates explain 76% of declining unemployment after the reform, a fact unexplained by existing research focusing on job finding rates. The reduction in separation rates is heterogeneous, with long-term employed, high-wage workers being most affected. We causally link our empirical findings to the reduction in long-term unemployment benefits using a heterogeneous-agent labor market search model. Absent the reform, unemployment rates would be 50% higher today. |
| Keywords: | unemployment insurance, labor market flows, endogenous separations |
| JEL: | E24 J63 J64 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7379&r=all |
| By: | Martin Benjamin Hackmann; R. Vincent Pohl |
| Abstract: | How do patient and provider incentives affect mode and cost of long-term care? Our analysis of 1 million nursing home stays yields three main insights. First, Medicaid-covered residents prolong their stays instead of transitioning to community-based care due to limited cost-sharing. Second, nursing homes shorten Medicaid stays when capacity binds to admit more profitable out-of-pocket payers. Third, providers react more elastically to financial incentives than patients, so moving to episode-based provider reimbursement is more effective in shortening Medicaid stays than increasing resident cost-sharing. Moreover, we do not find evidence for health improvements due to longer stays for marginal Medicaid beneficiaries. |
| Keywords: | long-term care, nursing homes, patient incentives, provider incentives, cost-sharing, episode-based reimbursement, medicaid |
| JEL: | H51 H75 I11 I13 I18 J14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7373&r=all |
| By: | Düll, Robert; König, Felix; Ohls, Jana |
| Abstract: | A sovereign debt crisis can have significant knock-on effects in the financial markets and put financial stability at risk. This paper focuses on the transmission of sovereign risk to insurance companies as some of the largest institutional investors in the sovereign bond market. We use a firm level panel dataset that covers large insurance companies, banks and non-financial firms from nine countries over the time period from 1 January 2008 to 1 May 2013. We find significant and robust transmission effects from sovereign risk to domestic insurers. The impact on insurers is not significantly different from that on banks but larger than for non-financial firms. We find that systemically important insurers are more closely linked to the domestic sovereign. Based on European data, we show that risks in sovereign bond portfolios are an important driver of insurer risk, which is not reflected in current insurance regulation (incl. Solvency II in Europe). |
| Keywords: | insurance; sovereign risk; sovereign bond portfolio |
| JEL: | G32 F3 G3 |
| Date: | 2017–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:83195&r=all |
| By: | Singh, Nirvikar |
| Abstract: | This paper lays out some of the basic concepts surrounding financial inclusion, including access to banking, digital payments and financial literacy, as well as markets for health insurance, crop insurance, agricultural credit, small firm finance, and microcredit/ microfinance. It goes on to discuss various empirical and institutional studies of these dimensions of financial inclusion in the context of developing countries. The paper then outlines several recent studies for India which pertain to these specific aspects of financial inclusion. Finally, the paper draws lessons for policy-making and future research directions. Important considerations that emerge from the overview are the significance of social and economic context, the need to consider behavioral biases connected to situations involving time and risk, the interaction of different dimensions of financial inclusion, the importance of details of policy design, and the limited understanding we still have of many of the factors underlying the functioning of financial markets. |
| Keywords: | financial inclusion, saving, insurance, credit, microfinance, financial literacy, India |
| JEL: | G21 G22 G38 O16 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:91047&r=all |
| By: | Ranganathan, Thiagu; Mishra, Ashok K.; Kumar, Anjani |
| Abstract: | The paper explores the spread of crop insurance (CI) in India and analyzes the association of factors affecting the demand for crop insurance. Additionally, using large farm-level survey data from Eastern India, the study assesses CI’s impact on rice yields of smallholder rice producers. The study tests for robustness of the findings after controlling for other covariates and endogeneity. Results indicate CI has a positive and significant impact on rice yields. In particular, the ATET and ATEUT effect of CI on rice yields is about 47%. However, CI’s impact on rice yields is heterogeneous among farm sizes of smallholders. Participation in CI increased rice yields of large farms by 49% but increased rice yields of small farms by only 16%. |
| Keywords: | Crop Production/Industries, Risk and Uncertainty |
| Date: | 2018–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa19:281173&r=all |
| By: | Renaud Bourlès (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Yann Bramoullé (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Eduardo Perez-Richet (Sciences Po Paris & CEPR) |
| Abstract: | We provide the first analysis of the risk-sharing implications of altruism networks. Agents are embedded in a fixed network and care about each other. We study whether altruistic transfers help smooth consumption and how this depends on the shape of the network. We identify two benchmarks where altruism networks generate efficient insurance: for any shock when the network of perfect altruism is strongly connected and for any small shock when the network of transfers is weakly connected. We show that the extent of informal insurance depends on the average path length of the altruism network and that small shocks are partially insured by endogenous risk-sharing communities. We uncover complex structural effects. Under iid incomes, central agents tend to be better insured, the consumption correlation between two agents is positive and tends to decrease with network distance, and a new link can decrease or increase the consumption variance of indirect neighbors. Overall, we show that altruism in networks has a first-order impact on risk and generates specific patterns of consumption smoothing. |
| Keywords: | altruism, networks, risk sharing, Informal Insurance |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1838&r=all |
| By: | Abdulai, Awudu; Goetz, Renan; Ali, Williams; Owusu, Victor |
| Abstract: | This paper analyzes smallholder farmers’ decisions to participate in crop insurance programs, using cross-sectional data from cocoa farmers in the Ashanti, Brong-Ahafo and Western Regions of Ghana. Given the significance of output uncertainty and imperfect capital and insurance markets, we develop a theoretical framework to show how risk preferences and liquidity constraints influence farmers’ crop insurance participation decisions. We use a stated preference approach to obtain information on farmers’ willingness to participate in crop insurance programs, and a discrete choice model to examine the factors that influence their participation decisions. We find that risk preferences and liquidity constraints influence farmers’ willingness to participate in crop insurance programs. The results also show that the probability of participating in crop insurance programs is higher for males, the more educated, and those who trust others. The levels of fertilizer and pesticide expenditure and the access to credit are also found to significantly influence the decision to adopt the programs. |
| Keywords: | Crop Production/Industries, Risk and Uncertainty |
| Date: | 2018–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:assa19:281162&r=all |
| By: | Sanisława Golinowska; Christoph Sowada; Marzena Tambor; Alicja Domagała; Krzysztof Kuszewski |
| Abstract: | The health protection system is the object of constant pressures and difficulties in mitigating them, and even more so eliminating or at least reducing them. Changes are undertaken under the influence of a one-sided political assessment, the interests of various groups of participants or the protests of successive groups of medical staff. There is no professional and fully documented diagnosis of the system, made by independent experts, which could serve as the basis for a comprehensive health protection reform plan, rather than individual, incidental changes that disrupt the system’s already very fragile balance. A well thought-out reform, properly distributed over time, so that at no point does it cause negative health effects. A reform agreed among stakeholders and adopted with understanding of the need for changes, so that it is supported by society. A reform for which there will be funds, institutions and engaged professionals – leaders in health protection. A reform that won’t be criticized or changed when the government changes. Such a reform is waiting to be presented and debated. We begin this process by pointing out and presenting the system’s main problems. |
| Keywords: | public health, copayments, expenditures on health, health insurance, health professionals, National Health Programs, public health problems |
| JEL: | H51 I13 I18 |
| Date: | 2018–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:sec:mbanks:0156&r=all |
| By: | International Monetary Fund |
| Abstract: | The insurance sector has significant potential for expansion and to contribute to economic growth as an important part of the financial sector. While the insurance sector has grown at 10 percent annually over the last 5 years, on average, and remains profitable with high solvency ratios, the insurance penetration and density are lower than other emerging markets. Nevertheless, the insurance industry has the potential to reach to much higher levels of insurance penetration. A few large conglomerate groups—composed of banks, insurers and investments funds—dominate the insurance sector. Conglomerate groups account for more than 75 percent of the market share. Reflecting very conservative regulations imposed by the Banco Central do Brasil (BCB) and the Superintendency of Private Insurance (SUSEP), the interlinkages between banks and insurers are limited. Nevertheless, material contagion may occur through a reputational channel, adversely impacting the profitability of the linked business. |
| Date: | 2018–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:18/343&r=all |
| By: | Mohammad Abu-Zaineh (Faculty of Medicine, Aix-Marseille Univ, INSERM - Institut National de la Santé et de la Recherche Médicale, IRD - Institut de Recherche pour le Développement, SESSTIM - U912 INSERM - AMU - IRD - Sciences Economiques et Sociales de la Santé & Traitement de l'Information Médicale - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université - INSERM - Institut National de la Santé et de la Recherche Médicale, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Olivier Chanel (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, IDEP - Institut d'Économie Publique - GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Khaled Makhloufi (Faculty of Medicine, Aix-Marseille Univ, INSERM - Institut National de la Santé et de la Recherche Médicale, IRD - Institut de Recherche pour le Développement, SESSTIM - U912 INSERM - AMU - IRD - Sciences Economiques et Sociales de la Santé & Traitement de l'Information Médicale - IRD - Institut de Recherche pour le Développement - AMU - Aix Marseille Université - INSERM - Institut National de la Santé et de la Recherche Médicale) |
| Abstract: | In their attempts to implement universal health coverage (UHC), different developing countries encounter different types of obstacles. In Tunisia, major challenges include a widespread informal sector and protestors' general discontent with rising economic insecurity and inequality, the rollback of the state and public welfare. We apply a contingent valuation survey to a non-healthcare-covered Tunisian sample vis-à-vis joining and paying for a health insurance scheme. We pay attention to the nature of the willingness- to-pay (WTP) values obtained, distinguishing genuine null from protest values. The latter may reflect not only protesters' beliefs regarding the survey, but also their lack of trust in government's commitment to ensuring the provision of quality healthcare. We use alternative econometric modeling strategies to account and correct for selection issues arising from protest answers. Our results support the presence of self- selection and, by predicting protesters' WTP, allow the "true" sample mean WTP to be computed. This appears to be about 14% higher than the elicited mean WTP. The WTP of the poorest non-covered respondents represents about one and a half times the current contributions of the poorest formal sector enrollees, suggesting that voluntary affiliation to the formal health insurance scheme could be a step towards achieving UHC. Overall, we highlight the importance of taking into account protest positions for the evaluation of progress towards UHC. |
| Keywords: | willingness-to-pay,contingent valuation,universal health coverage,self-selection,protest attitude |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01962176&r=all |
| By: | Mirza, Arshad; Singh, Nirvikar |
| Abstract: | The context of the paper's analysis is the arguably poor state of mental health care in India, as well as an unprecedented level of policy attention to the issue. The questions posed pertain to (1) the provision of such care in hospitals, (2) non-hospital provision, including by non-medical providers, (3) issues of education and social acceptance, (4) affordability, (5) within-country variation of care and possibilities for benchmarking, (6) aggregate resource impacts of a concerted effort to change policies and improve care, and (7) the shape of a more effective “continuum of care for mental health issues. The paper argues that, while new laws and policies being introduced in India propose ideas and changes that are groundbreaking for that country, leading to cautious optimism, there still are many gaps in the understanding of the challenges of the provision of increased access to, as well as better quality, mental health care throughout the country. These challenges can be understood on two fronts: one is the psychiatric and medical aspect of the issues, and the other is the management and administration of the system. A priority in achieving the goals of greater access and better quality is to increase the number of trained personnel at all levels of specialization and skilling that are relevant. Further, while the new legal framework and policy identify the importance of information technology in rapid expansion of access to mental healthcare, more context-specific research and trials are needed. With respect to the administration and management needs of the public system, important challenges will be the need for significant organizational innovations in the education system, and cultural changes that allow specialized medical professionals to accept the use of software and less-qualified, more dispersed, frontline providers. A final area is the interface between the public and private sectors, including the role of non-profit organizations: challenges include information sharing, division of responsibilities, and resource allocation. |
| Keywords: | Mental health, India, healthcare, insurance, public policy, human rights, discrimination |
| JEL: | I10 I18 J78 K39 Z18 |
| Date: | 2018–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:91046&r=all |
| By: | Tanika Chakraborty; Manish Pandey |
| Abstract: | We analyze a household’s decision to have temporary international migrants when faced with shocks. We consider a household maximization problem and derive the effects of different kinds of shocks on the migration decision. Using four waves of the Life in Kyrgyzstan panel surveys, we empirically examine these effects. We contribute to the literature by accounting for household level unobserved heterogeneity, distinguishing between onward and return migration, and examining the underlying insurance motive of migration. We find that while agricultural and household specific idiosyncratic shocks have a positive effect on the likelihood to migrate, displacement shocks have a negative effect. The difference between the effects of these shocks is explained by the dynamics of migration. While agricultural and displacement shocks affect return migration, household specific idiosyncratic shocks drive onward migration. We further find that the effect of the displacement and agricultural shocks on onward and return migration are muted when households have easier access to informal borrowing. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:win:winwop:2018-03&r=all |