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on Insurance Economics |
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Issue of 2007‒11‒03
six papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Juergen Jung (Indiana University Bloomington); Chung Tran (Indiana University Bloomington) |
| Abstract: | We analyze whether a consumer driven health care plan like the newly established Health Savings Accounts (HSAs) can reduce health care expenditures in the United States and increase the fraction of the population with health insurance. We use an overlapping generations model with health uncertainty and endogenous health care spending. Agents can choose between a low deductible- and a high deductible health insurance. If agents choose to purchase the high deductible health insurance, they are allowed to contribute tax free to an HSA. We examine the steady state effects of introducing HSAs into a system with private health insurance for young agents and Medicare for old agents. Since the model is a general equilibrium model, we fully account for feedback effects from both, factor markets and insurance markets. Our results from numerical simulations indicate that HSAs can decrease total health expenditures by up to 3% of GDP but increase the number of uninsured individuals by almost 5%. Furthermore, HSAs decrease the aggregate level of health capital and therefore decrease output. We also address possible extensions of the HSA reform that include the eligibility to pay health insurance premiums with HSA funds, the full privatization of Medicaid via HSAs, and Medicare for workers. |
| Keywords: | Health Savings Accounts |
| JEL: | H51 I18 I38 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:inu:caeprp:2007023&r=ias |
| By: | Davide Carbonai; Giovanni Di Bartolomeo |
| Abstract: | This paper investigates the market structure of the insurance business by analyzing the (interlock) linkages among companies created by their directors. We focus on the non-life business since this is a sector relatively closed with respect to the competition with other financial activities; an absence of industry competition cannot thus be compensated by other agents. We apply the graph theory to describe the network and the principal component analysis to summarize information and verify the correlation between direct interlocking and companies’ market shares. |
| Keywords: | Non-life insurance, antitrust, competition, interlocking directorates, network economics |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0001&r=ias |
| By: | Strulik, Holger; Tyran, Jean-Robert; Vanini, Paolo |
| Abstract: | We develop a simple model of labor market participation, human capital degradation, and re-training. We focus on how non-participation, as a distinct state from unemployment and employment, is determined by the welfare system in interaction with labor market conditions and personal characteristics. We provide a tractable framework to analyze how the decisions to exit the labor force and to mitigate human capital degradation by re-training depend on a broad range of factors such as education, skill degradation, age, labor market shocks, labor taxes, unemployment insurance benefits and social assistance. We extend our framework by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap. |
| Keywords: | Unemployment, Non-Participation, Skill Degradation, Re-training, Unemployment Benefits, Social Assistance, Present-Biased Preferences. |
| JEL: | J64 J31 J38 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-377&r=ias |
| By: | Stephanie Knox (CHERE, University of Technology, Sydney); Elizabeth Savage (CHERE, University of Technology, Sydney); Denzil Fiebig; Vineta Salale |
| Abstract: | The percentage of Australians taking up Private Health Insurance (PHI) was in decline following the introduction of Medicare in 1984 (PHIAC). To arrest this decline the Australian Government introduced a suite of policies, between 1997 and 2000, to create incentives for Australians to purchase private health insurance. These policies include an increased Medicare levy for those without PHI on high incomes, introduced in 1997, a 30% rebate for private hospital cover (introduced 1998), and the Lifetime Health Cover (LHC) policy where PHI premiums are set at age of entry, increasing for each year older than 30 years (introduced 2000). In 2004 the longitudinal study on Household Income and Labour Dynamics in Australia (HILDA), included a series of questions on private health insurance and hospital use. We used the HILDA data to investigate the demographic, health and income factors related to the PHI decisions, especially around the introduction of the Lifetime Health Cover policy. Specifically we investigate who was most influenced to purchase PHI (specifically hospital cover) in 2000 as a response to the Lifetime Health Cover policy deadline. Are those who have joined PHI since the introduction of LHC different from those who joined prior to LHC? What are the characteristics of those who have dropped PHI since the introduction of LHC? We model the PHI outcomes allowing for heterogeneity of choice and correlation across alternatives. After controlling for other factors, we find that LHC prompted moderately well-off working age adults (30-49 yrs) to purchase before the 2000 deadline. Young singles or couples with no children, and the overseas born were more likely to purchase since 2000, while the relatively less well-off continue to drop PHI in spite of current policy incentives. |
| Keywords: | private health insurance, Australia |
| JEL: | I10 |
| URL: | http://d.repec.org/n?u=RePEc:her:chewps:2007/8&r=ias |
| By: | Faraglia, Elisa; Marcet, Albert; Scott, Andrew |
| Abstract: | Assuming the role of debt management is to provide hedging against fiscal shocks we consider three questions: i) what indicators can be used to assess the performance of debt management? ii) how well have historical debt management policies performed? and iii) how is that performance affected by variations in debt issuance? We consider these questions using OECD data on the market value of government debt between 1970 and 2000. Motivated by both the optimal taxation literature and broad considerations of debt stability we propose a range of performance indicators for debt management. We evaluate these using Monte Carlo analysis and find that those based on the relative persistence of debt perform best. Calculating these measures for OECD data provides only limited evidence that debt management has helped insulate policy against unexpected fiscal shocks. We also find that the degree of fiscal insurance achieved is not well connected to cross country variations in debt issuance patterns. Given the limited volatility observed in the yield curve the relatively small dispersion of debt management practices across countries makes little difference to the realised degree of fiscal insurance. |
| Keywords: | Bond Markets; Debt Management; Fiscal Insurance; Fiscal Policy |
| JEL: | E43 E62 H62 H63 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6539&r=ias |
| By: | Xufeng Qian (Moody's); Louise Russell (Rutgers/Economics and Institute for Health); Elmira Valiyeva (University of Toronto); Jane Miller (Rutgers/Bloustein School and Institute for Health) |
| Abstract: | Previous studies of Medicare’s prospective payment system for hospitals (PPS), introduced in 1983, evaluated only its first few years, using data collected during the hospital stay to control for patients’ health. We examine transitions among health care settings over a full decade following implementation of PPS, using survival models and a national longitudinal survey with independent information on health. We find that the rate of discharge from hospitals to nursing homes continued to rise as PPS matured, hospital readmissions from the community dropped after the early years, and risk of nursing home admission from the community soon after hospital discharge tripled. Evaluations of new payment systems for one type of provider need to be comprehensive in order to capture the full effects on other providers. |
| Keywords: | Medicare, prospective payment |
| JEL: | I18 C41 |
| Date: | 2007–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:200707&r=ias |