nep-ias New Economics Papers
on Insurance Economics
Issue of 2012‒09‒16
four papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management
  1. Consumer Inertia and Firm Pricing in the Medicare Part D Prescription Drug Insurance Exchange By Keith M. Marzilli Ericson
  2. Health and Wealth of a Nation: Employer-Based Health Insurance and the Affordable Care Act. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research By Nan L. Maxwell
  3. Recessions, Older Workers, and Longevity: How Long Are Recessions Good For Your Health? By Courtney C. Coile; Phillip B. Levine; Robin McKnight
  4. Bad Jobs on the Rise By John Schmitt; Janelle Jones
  1. By: Keith M. Marzilli Ericson
    Abstract: I use the Medicare Part D prescription drug insurance market to examine the dynamics of firm interaction with consumers on an insurance exchange. Enrollment data show that consumers face switching frictions leading to inertia in plan choice, and a regression discontinuity design indicates initial defaults have persistent effects. In the absence of commitment to future prices, theory predicts firms respond to inertia by raising prices on existing enrollees, while introducing cheaper alternative plans. The complete set of enrollment and price data from 2006 through 2010 confirms this prediction: older plans have approximately 10% higher premiums than comparable new plans.
    JEL: H51 I1 I11 I18 I28 L11 L38 L51
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18359&r=ias
  2. By: Nan L. Maxwell
    Keywords: ACA, Affordable Care Act, Health Insurance, Employment
    JEL: I J
    Date: 2012–12–30
    URL: http://d.repec.org/n?u=RePEc:mpr:mprres:7526&r=ias
  3. By: Courtney C. Coile; Phillip B. Levine; Robin McKnight
    Abstract: This paper examines the impact of exposure to higher unemployment rates in the pre-retirement years on subsequent mortality. Although past research has found that recessions reduce contemporaneous mortality, these short-term effects may reverse over time, particularly for older workers. If workers experience an economic downturn in their late 50s, they may face several years of reduced employment and earnings before “retiring” when they reach Social Security eligibility at age 62. They also may experience lost health insurance, and therefore higher financial barriers to health care, through age 65, when Medicare becomes available. All of these experiences could contribute to weaker long-term health outcomes. To examine these hypotheses, we use Vital Statistics mortality data between 1969 and 2008 to generate age-specific cohort survival probabilities at older ages. We then link these survival probabilities to labor market conditions at earlier ages. We also use data from the 1980-2010 March Current Population Surveys and the 1991-2010 Behavioral Risk Factor Surveillance System surveys to explore potential mechanisms for this health effect. Our results indicate that experiencing a recession in one’s late 50s leads to a reduction in longevity. We also find that this exposure leads to several years of reduced employment, health insurance coverage, and health care utilization which may contribute to the lower long-term likelihood of survival.
    JEL: I18 J26
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18361&r=ias
  4. By: John Schmitt; Janelle Jones
    Abstract: The decline in the economy’s ability to create good jobs is related to deterioration in the bargaining power of workers, especially those at the middle and the bottom of the pay scale. The restructuring of the U.S. labor market – including the decline in the inflation-adjusted value of the minimum wage, the fall in unionization, privatization, deregulation, pro-corporate trade agreements, a dysfunctional immigration system, and macroeconomic policy that has with few exceptions kept unemployment well above the full employment level – has substantially reduced the bargaining power of U.S. workers, effectively pulling the bottom out of the labor market and increasing the share of bad jobs in the economy. In this paper, we define a bad job as one that pays less than $37,000 per year (in inflation-adjusted 2010 dollars); lacks employer-provided health insurance; and has no employer-sponsored retirement plan. By our calculations, about 24 percent of U.S. workers were in a bad job in 2010 (the most recently available data). The share of bad jobs in the economy is substantially higher than it was in 1979, when 18 percent of workers were in a bad job by the same definition. The problems we identify here are long-term and largely unrelated to the Great Recession. Most of the increase in bad jobs – to 22 percent in 2007 – occurred before the recession and subsequent weak recovery.
    Keywords: good jobs, bad jobs, retirement, pensions, health insurance, wages, labor, education
    JEL: J J3 J31 J32 J38 J5 J1 J11 J15 I I2 I24 I25
    Date: 2012–09
    URL: http://d.repec.org/n?u=RePEc:epo:papers:2012-23&r=ias
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