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on Insurance Economics |
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Issue of 2020‒11‒09
ten papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Jeffrey Clemens; Drew McNichols; Joseph J. Sabia |
| Abstract: | The long-run costs and benefits of social insurance expansions may not be realized until a program has been in place through a cycle of boom, bust, and recovery. In the case of the Affordable Care Act (ACA), the arrival of the program's inaugural bust and recovery have been hastened by the COVID-19 pandemic. In this context, our analysis begins by developing two facts. First, during the pre-pandemic boom, we show that the ACA's effects had largely stabilized by 2016. Second, we develop a new fact involving variations in the ACA's effects across industries. Specifically, we show that the ACA’s effects differed dramatically across industries with lower versus higher levels of pre-ACA insurance coverage, and that this difference cannot be explained by differences in workers’ incomes or other observable characteristics, nor by geographic differences in pre-ACA uninsured rates. Finally, we set the stage for pre-committed analyses of the ACA's effects over the remainder of the current cycle of boom, bust, and recovery. In so doing, we seek to advance the use of pre-committed research designs in observational settings. |
| JEL: | H51 H53 I13 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27999&r=all |
| By: | Tal Gross; Timothy Layton; Daniel Prinz |
| Abstract: | Some consumers lack the cash needed to pay for medical care. As a result, they either delay care until they can pay for it or they forgo the care altogether. To test for such a possibility, we study the distribution of monthly Social Security checks among Medicare Part D enrollees. When Social Security checks are distributed, prescription fills increase by 6-12 percent. In that sense, drug consumption of low-income Medicare recipients is "liquidity sensitive." We then study recipients who transition onto a program that eliminates copayments. When those recipients do not face copayments, their drug consumption becomes less liquidity sensitive. That finding implies that, beyond risk protection, generous insurance also provides recipients with the ability to consume healthcare when they need it rather than when they have cash. Further, we find that recipients whose drug consumption is most liquidity sensitive exhibit price elasticities of demand that are twice the size of the average elasticity, suggesting that more-generous insurance causes recipients both to re-time prescription filling and also to start filling prescriptions that they otherwise would not fill. We present a stylized model that uses this finding to call into question the conventional interpretation of demand-response to price as solely inefficient moral hazard. |
| JEL: | H0 I1 I13 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27977&r=all |
| By: | Anya Samek; Justin R. Sydnor |
| Abstract: | Insurance choices are often hard to rationalize by standard theory and frequently appear sub-optimal. A key reason may be that people are unable to map the cost-sharing features of plans to their distribution of financial consequences. We develop and experimentally test a decision aid that provides this mapping to simplify comparisons of plan options. In two experiments mirroring typical health insurance decisions, we find that when people choose plans using standard feature-based information, they violate dominance at high rates. Our distribution-based decision aid substantially reduces dominance violations, and also changes choice patterns in situations where there is no dominant option. Choice patterns under feature-based menus can be most easily rationalized by models of heuristic choices, such as minimizing premium or deductible. With the decision aid, though, significantly more people have choice patterns that are better explained by expected utility theory. We compare our distribution-based approach to an alternative of providing estimates of the expected value of costs, which is the most common decision-support available in most insurance markets. Providing expected values affects choices in a similar direction as our consequence-based approach, but in a more muted fashion, and is only about half as effective at reducing dominance violations. |
| JEL: | D81 D83 G22 I13 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28003&r=all |
| By: | Olayemi, Olufemi Olabode; Okonji, Patrick Sunday; Gbadamosi, Taofeek Olalekan; Oghojafor, Ben E. Akpoyomare |
| Abstract: | This study investigated Ethical Issues in Business and Performance of Nigerian Insurance Companies. The specific objective was to establish the effect of business ethics variables on the performance of Nigeria Insurance Companies. Data collection was with the aid of a structured questionnaire administered on 411 employees of insurance companies in Nigeria in the 10 selected organization. A total of 390 responses were processed for analysis. . Statistical techniques such as descriptive and inferential statistics (regression and correlation) were applied in the analysis. It was observed that there exists strong relationship between business ethics and performance of Nigerian Insurance companies. Workforce diversity was found to have negative connection with Nigerian Insurance Companies’ Performance. It was revealed that strong positive relationship exists between organizational ethical code and Nigerian Insurance Companies’ Performance and environmental regulatory compliance impact the performance of Nigerian Insurance Companies negatively. While all the independent variables were found to be statistically significant in predicting the Nigerian Insurance Companies’ Performance. It was concluded that ethical issues significantly impact Nigerian Insurance companies’ performance. To enhance resource utilization and performance, it was suggested that Nigerian Insurance company may consider putting ethical issues as priority in all dealings and guide it jealously in order to wax stronger in the industry. |
| Keywords: | Business Ethics, Performance, Nigeria Insurance Company |
| JEL: | M00 M10 M14 |
| Date: | 2020–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:103652&r=all |
| By: | H.P.P. Donfouet (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, APHRC Campus - African Population and Health Research Center, Inc); S.F. Mohamed (APHRC Campus - African Population and Health Research Center, Inc); P. Otieno (APHRC Campus - African Population and Health Research Center, Inc); E. Wambiya (APHRC Campus - African Population and Health Research Center, Inc); M.K. Mutua (APHRC Campus - African Population and Health Research Center, Inc); G. Danaei (Harvard T.H. Chan School of Public Health) |
| Abstract: | The failure of the market and government to provide quality healthcare services have been the motivation to set up social health enterprise. However, the value for money associated with setting up a social health enterprise in sub-Sahara African countries has been relatively unexplored in the literature. The study presents the first empirical estimates of the mean willingness-to-pay (WTP) for setting up a social health enterprise that will simultaneously run a health center and provide health insurance scheme in an urban resource-poor setting and explores whether the benefits outweigh the costs. The contingent valuation method is used to estimate the mean WTP for the health insurance scheme proposed by the social health enterprise in Viwandani slum (Nairobi, Kenya). The survey was conducted between June and July 2018 on 300 households. We find that the feasibility of setting up a social health enterprise could be promising with 97 percent of respondents willing to pay about US$ 2 per person per month for a scheme that would provide quality healthcare services. More importantly, setting up the social health enterprise will yield a positive net profit, and investors could expect US$ 1.11 in benefits for each US$ 1 of costs of investment in setting up the social health enterprise. We, therefore, conclude that this health policy in this urban resource-poor setting could be a viable solution to reach the neglected urban households in the Kenyan slums. |
| Keywords: | Contingent valuation method,Cost-benefit analysis,Social health enterprise |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02961015&r=all |
| By: | Christian Bünnings; Lucas Hafner; Simon Reif; Harald Tauchmann |
| Abstract: | From an economic perspective, marriage and long-term partnership can be seen as a risk-pooling device. This informal insurance contract is, however, not fully enforceable. Each partner is free to leave when his or her support is needed in case of an adverse life event. An adverse health shock is a prominent example for such events. Since relationship breakdown itself is an extremely stressful experience, partnership may backfire as informal insurance against health risks, if health shocks increase the likelihood of relationship breakdown. We address this question empirically, using survey data from Germany. Results from various matching estimators indicate that adverse shocks to mental health substantially increase the probability of a couple splitting up over the following two years. In contrast, there is little effect of a sharp decrease in physical health on relationship stability. If at all, physical health shocks that hit both partners simultaneously stabilize a relationship. |
| Keywords: | separation, partnership dissolution, health shock, MCS, PCS, matching |
| JEL: | I12 J12 D13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp1110&r=all |
| By: | Bünnings, Christian; Hafner, Lucas; Reif, Simon; Tauchmann, Harald |
| Abstract: | From an economic perspective, marriage and long-term partnership can be seen as a riskpooling device. This informal insurance contract is, however, not fully enforceable. Each partner is free to leave when his or her support is needed in case of an adverse life event. An adverse health shock is a prominent example for such events. Since relationship breakdown itself is an extremely stressful experience, partnership may backfire as informal insurance against health risks, if health shocks increase the likelihood of relationship breakdown. We address this question empirically, using survey data from Germany. Results from various matching estimators indicate that adverse shocks to mental health substantially increase the probability of a couple splitting up over the following two years. In contrast, there is little effect of a sharp decrease in physical health on relationship stability. If at all, physical health shocks that hit both partners simultaneously stabilize a relationship. |
| Keywords: | separation,partnership dissolution,health shock,MCS,PCS,matching |
| JEL: | I12 J12 D13 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:868&r=all |
| By: | Sena Coskun; Husnu Dalgic |
| Abstract: | Fertility in the US has exhibited a procyclical pattern since the 1970s. We argue that gender differences in employment risk leads to procyclical fertility: men tend to work in volatile and procyclical industries, while women are more likely to work in relatively stable and countercyclical industries. The relative gender employment gap is countercyclical as women become breadwinners in recessions, producing an insurance effect of female income. Our quantitative framework features a general equilibrium OLG model with endogenous fertility and human capital choice and shows that the current gender industry composition in the US data fully accounts for the procyclicality observed. We can also generate countercyclical fertility, as observed in the 1960s, either when the female income share is low or procyclical. Finally, we argue that the insurance effect of female income in bad times tilts the quality-quantity trade-off towards quality. |
| Keywords: | fertility, fertility cyclicality, industry cyclicality, gender asymmetric employment, gender income gap, quality-quantity trade-off |
| JEL: | E24 E32 J11 J13 J16 J21 J24 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_142v2&r=all |
| By: | Avxentyev Nikolay (Gaidar Institute for Economic Policy); Nazarov Vladimir (Gaidar Institute for Economic Policy); Sisigina Natalya (Gaidar Institute for Economic Policy) |
| Abstract: | In many ways, the year 2019 was supposed to be a watershed for Russia’s healthcare system. This was the final year of the ambitious six-year program set forth in the May 2012 Executive Orders of the President, to be followed by even more substantial transformations under the new national project ‘Healthcare’. Meanwhile, the burgeoning unified national health system was continually evolving, its goal being to provide the entire nation with guaranteed equal rights to medical care. |
| Keywords: | Russian economy, health care system |
| JEL: | I1 I15 I18 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2020-1056&r=all |
| By: | Edward C. Norton; Emily J. Lawton; Jun Li |
| Abstract: | One of the most important changes to the United States health care system over the last two decades is the emergence of pay-for-performance as a way to encourage hospitals and other providers to improve quality of care. Unlike fee-for-service, these value-based purchasing programs measure aspects of quality and financially reward hospitals that are outstanding or at least improving in their care. Prior research has shown that hospitals often improve more when the marginal financial incentives are larger. However, the exact relationship between marginal financial incentives and year-over-year improvement in measures remains unclear. In this study, we use national 2015 2018 data on approximately 2,700 hospitals to estimate how hospitals respond to pay-for-performance incentives in the Hospital Value-Based Purchasing (HVBP) Program. We show that this relationship is non-linear, has strong serial correlation, is somewhat similar for safety-net hospitals as non-safety-net hospitals, and is proportional to the size of the Medicare patient population. |
| JEL: | I11 I18 |
| Date: | 2020–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27948&r=all |