nep-ias New Economics Papers
on Insurance Economics
Issue of 2022‒05‒23
fifteen papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Estimating Equilibrium in Health Insurance Exchanges: Price Competition and Subsidy Design under the ACA By Pietro Tebaldi
  2. Prioritising universal health insurance in Uzbekistan By Terry McKinley
  3. Privatizing disability insurance By Seibold, Arthur; Seitz, Sebastian; Siegloch, Sebastian
  4. Budgetary Effects of a Policy That Would Lower the Age of Eligibility for Medicare to 60 By Congressional Budget Office
  5. The state of social insurance for agricultural workers in the Near East and North Africa and challenges for expansion By Lucas Sato
  6. Banking Resolution: Expansion of the Resolution Toolkit and the Changing Role of Deposit Insurers By Ryan Defina
  7. Relationship Between Physician Burnout and the Quality and Cost of Care for Medicare Beneficiaries is Complex By Lawrence P. Casalino; Jing Li; Lars E. Peterson; Diane Rittenhouse; Manyao Zhang; Eloise May O’Donnell; Robert L. Phillips
  8. Five Emerging Issues in Deposit Insurance By Bert Van Roosebeke; Ryan Defina
  9. Willingness to pay, surplus and Insurance policy under dual theory By Neji Saidi
  10. Climate Change Fever: Can Deposit Insurers Stay Cool? By Bert Van Roosebeke; Ryan Defina
  11. Evaluation of the Medicare Care Choices Model: Annual Report 4 By Keith Kranker; Matthew Niedzwiecki; R. Vincent Pohl; Arnold Chen; Marlena Luhr; Lauren Vollmer Forrow; Valerie Cheh
  12. Catastrophic health expenditure and mental health in the older Chinese population: the moderating role of social health insurance By Yang, Wei; Hu, Bo
  13. Fortalecimiento de los sistemas de protección social de la región: aprendizajes a partir de la pandemia de COVID-19 By Amarante, Verónica
  14. Competing Sellers in Security-Bid Auctions under Risk-Averse Bidders By Diego Carrasco-Novoa; Allan Hernández-Chanto
  15. Pharmacy Benefit Managers and Vertical Relationships in Drug Supply: State of Current Research By Zarek C. Brot-Goldberg; Catherine Che; Benjamin R. Handel

  1. By: Pietro Tebaldi
    Abstract: In government-sponsored health insurance, subsidy design affects market outcomes. First, holding premiums fixed, subsidies determine insurance uptake and average cost. Insurers then respond to these changes, adjusting premiums. Combining data from the first four years of the California ACA marketplace with a model of insurance demand, cost, and insurers’ competition, I quantify the impact of alternative subsidy designs on premiums, enrollment, costs, public spending, and consumer surplus. Younger individuals are more price sensitive and cheaper to cover. Increasing subsidies to this group would make all buyers better off, increase market participation, and lower average costs and average subsidies.
    JEL: I13 I18 L98
    Date: 2022–03
  2. By: Terry McKinley (IPC-IG)
    Keywords: Uzbekistan; social protection; health insurance
    Date: 2022–04
  3. By: Seibold, Arthur; Seitz, Sebastian; Siegloch, Sebastian
    Abstract: Public disability insurance (DI) programs in many countries face pressure to reduce their generosity in order to remain sustainable. In this paper, we investigate the welfare effects of giving a larger role to private insurance markets in the face of public DI cuts. Exploiting a unique reform that abolished one part of the German public DI system for younger cohorts, we find that despite significant crowding-in effects, overall private DI take-up remains modest. Private DI tends to be concentrated among high-income, high-education and low-risk individuals. We do not find any evidence of adverse selection on unpriced risk. Finally, we estimate individual insurance valuations via a revealed preferences approach, a key input for welfare calculations. We find that observed willingness-to-pay of many individuals is low, such that providing coverage partly via a private DI market improves welfare. However, we show that distributional concerns as well as individual risk misperceptions can provide grounds for justifying a full public DI mandate.
    Keywords: disability insurance,privatization,welfare,microdata
    JEL: H55 G22 G52
    Date: 2022
  4. By: Congressional Budget Office
    Abstract: CBO and the staff of the Joint Committee on Taxation estimate that lowering the age of Medicare eligibility to 60 would increase federal budget deficits by $155 billion over the 2026–2031 period through the effects of that policy on federal revenues and mandatory spending. Enacting the policy would have a significant effect on primary sources of health insurance coverage, and it would increase the number of people insured.
    JEL: I13
    Date: 2022–05–16
  5. By: Lucas Sato (IPC-IG)
    Keywords: social protection; social insurance; rural development; agricultural workers; Near East and North Africa
    Date: 2021–03
  6. By: Ryan Defina (International Association of Deposit Insurers)
    Abstract: In this Policy Brief, we provide quantitative evidence demonstrating that the resolution toolkit has expanded considerably since the 2008 Global Financial Crisis (GFC). Purchase and assumption transactions, bridge bank facilitation and bail-in mechanisms have all become more available for bank resolution purposes. The use of such resolution tools is increasingly subject to least cost rules and to systemic failure considerations. These resolution tools may be available to different authorities, such as deposit insurers or resolution authorities, depending on the jurisdiction in question. Two of the three statistical models applied point to a significant increase in resolution powers for deposit insurers.
    Keywords: deposit insurance, bank resolution
    JEL: G21 G33
    Date: 2021–08
  7. By: Lawrence P. Casalino; Jing Li; Lars E. Peterson; Diane Rittenhouse; Manyao Zhang; Eloise May O’Donnell; Robert L. Phillips
    Abstract: Despite reports of a physician burnout epidemic, there is little research on the relationship between burnout and objective measures of care outcomes and no research on the relationship between burnout and costs of care.
  8. By: Bert Van Roosebeke (International Association of Deposit Insurers); Ryan Defina (International Association of Deposit Insurers)
    Abstract: Deposit insurers operate within an ever-evolving global financial system. This Policy Brief offers an overview of five emerging issues that are expected to significantly affect the activities of deposit insurers in the near future – climate change, utilisation of financial technology (‘fintech’), Covid-19 policy implications, deposit insurers’ role in resolution, and cross-border considerations. These issues were selected for inclusion based on their relevance to the operations of deposit insurers, connection to the IADI Core Principles for Effective Deposit Insurance Systems, and relative weight assigned in recent dialogue within the international community. Following a description of each of the issues, this Policy Brief explains why these issues are relevant to deposit insurers and identifies relevant global and regional policy initiatives. Deposit insurers may wish to consider these five emerging issues within the context of their own domestic policy settings, and to calibrate their response accordingly.
    Keywords: deposit insurance, bank resolution
    JEL: G21 G33
    Date: 2021–09
  9. By: Neji Saidi
    Abstract: In this paper, we aims to state some proprieties of willingness to pay (WTP) for partial risk reduction and links with insurance within the dual theory of decision. In the case of partial reduction, we get as Langlais (2005) that a risk-averse decision maker (DM) can have a willingness to pay small than this of a neutral one. By decomposition the WTP as Courbage and al (2008), we get that a strong averse DM is willing to give more for a reduction of a high probability portion rather than a low probability one. The main result is that in the dual theory, reducing probability of risk and supply insurance can be complementary if the surplus is increasing in risk reduction.
    Date: 2022–04
  10. By: Bert Van Roosebeke (International Association of Deposit Insurers); Ryan Defina (International Association of Deposit Insurers)
    Abstract: Whereas research regarding the impact of climate change on the global financial system is ever growing, the impact of climate change and risks related therewith on deposit insurance has remained largely undealt with in literature. As global financial standard-setters have set the treatment of climate risks high on the agenda , this Policy Brief represents the first attempt to identify five core challenges that climate change may pose to the activity of deposit insurers and their ability to deliver on key objectives. The paper also classifies the challenges as to their risk-nature as well as to their directness, urgency and the feasibility of deposit insurers’ to respond to them. Given the novel nature of these issues as well as the high uncertainty and long time horizon inherent to them, the discussion here is by no means meant to be exhaustive. It is also recognised that the scale and degree to which climate change affects deposit insurers may vary significantly. This may be so due to differences in mandates or geographical exposure to climate risks. Nevertheless, the breath and scope of climate change-related risks as well as financial standard-setters’ omnipresent activities in the field make this topic of strategic interest to the deposit insurance community. The links between these challenges and the IADI Core Principles underscores the strategic urgency of this contemporary policy issue.
    Keywords: deposit insurance, bank resolution
    JEL: G21 G33
    Date: 2021–10
  11. By: Keith Kranker; Matthew Niedzwiecki; R. Vincent Pohl; Arnold Chen; Marlena Luhr; Lauren Vollmer Forrow; Valerie Cheh
    Abstract: Evaluation of the Medicare Care Choices Model’s effects on beneficiaries’ outcomes from January 2016 to March 2021.
    Keywords: Medicare Care Choices Model, MCCM, CMS CMMI , aggressive treatment, end of life, hospice
  12. By: Yang, Wei; Hu, Bo
    Abstract: OBJECTIVES: Catastrophic health expenditure (CHE) has considerable effects on household living standards, but little is known regarding the relationships between CHE and people's mental health. Using China as an example, this study examines the association between CHE and mental health and investigates whether the association differs between those with and without social health insurance (SHI). METHODS: The data came from 3 waves of the China Health and Retirement Longitudinal Study (2011, 2013, and 2015, N = 13,166). We focused on older people aged 60 and older. We built panel data regression and quantile regression models to analyze the data. RESULTS: Incurring CHE is significantly associated with poor mental health. The association is weakened among older people receiving SHI, which indicates that SHI has a protective effect. Moreover, the association between CHE and mental health and the protective effect of SHI are stronger among those with mild or moderate mental health problems. DISCUSSION: Our findings provide empirical evidence that encourages the integration of psychologically informed approaches in health services. We also urge governments in low- and middle-income countries to consider more generous health financing mechanisms for older people with greater health care needs.
    Keywords: catastrophic health expenditure; mental health; social health insurance; older people; China; OUP deal
    JEL: N0
    Date: 2022–01–01
  13. By: Amarante, Verónica
    Abstract: La crisis sanitaria, social y económica ocasionada por la pandemia de enfermedad por coronavirus (COVID-19) puso a los sistemas de protección social en el centro de las respuestas de política pública que los países llevaron adelante para contener los efectos de la emergencia en la población. En América Latina, se observa una gran heterogeneidad en la forma en que estos sistemas se organizan en los países, la que, a su vez, se vincula a la capacidad que han tenido para hacer frente a las consecuencias de la pandemia. En el presente documento se exploran diversas propuestas, perspectivas e instrumentos que se han implementado como parte de las respuestas nacionales frente a la pandemia o que se han discutido en años recientes y que podrían contribuir al fortalecimiento de los sistemas de protección social en el futuro.
    Date: 2022–04–06
  14. By: Diego Carrasco-Novoa (School of Economics, University of Queensland, Brisbane, Australia); Allan Hernández-Chanto (School of Economics, University of Queensland, Brisbane, Australia)
    Abstract: We analyze security-bid auctions in which two risk-neutral sellers compete for riskaverse bidders. Sellers face a tradeoff in steepness because steeper securities extract more surplus but feature lower participation ex-ante. Nonetheless, steeper securities also provide higher insurance, making bidders more aggressive. We show that when bidders are homogeneously risk-averse, all equilibria are symmetric. Meanwhile, when they are heterogeneously risk-averse, there is always an equilibrium in which one seller chooses a steeper family to serve the more-risk-averse bidders, while the other chooses a flatter family to serve the less-risk-averse bidders. This result resembles a “Hotelling location” model in the steepness spectrum.
    Date: 2022–04
  15. By: Zarek C. Brot-Goldberg; Catherine Che; Benjamin R. Handel
    Abstract: Despite their importance to the supply of prescription drugs, there has been limited research on pharmacy benefit managers (PBMs) and their vertical relationships to insurers and drug manufacturers. This paper provides an overview of the current state of research on this topic, motivates why further research is needed, and discusses promising theoretical and empirical directions for that research.
    JEL: I11 I13 L1 L42
    Date: 2022–04

This nep-ias issue is ©2022 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.