Examining the Marginal Access Value of Private Health Insurance

According to a new theory advanced by Nyman (1999, 2003) , an important access motivation underlies the demand for health insurance. However, little empirical research has attempted to quantify and explain changes in the access value of health insurance. By assuming the demand for health insurance is derived from the demand for good health, this article shows mathematically that the marginal access value of private health insurance can be reasonably indexed by dividing the price of health insurance by a composite measure of medical prices. For the period from 1960 through 2002, national data for the United States suggests that the marginal access value of private health insurance has tended to increase over time. Based upon multiple regression analysis, marginal access value is shown to have increased over time in response to rising income, more generous benefit coverage, new medical technologies, and, in recent years, the backlash against health maintenance organizations (HMOs). In addition, expansions in the Medicaid program are shown to have slowed the growth of the marginal access value of private health insurance.     

Which Price is Right: Load or Premium?

This paper uses national time series data for the United States to investigate whether changes in the premium or loading fee offer a better explanation for variations in the percentage of the population with private health insurance from 1960 to 2004. The empirical results suggest that premium provides a better measure of price when estimating the demand for health insurance at the extensive margin. The empirical analysis also indicates that the aggregate short-run price and income elasticities of demand for health insurance are fairly close at ?0.19 and 0.27, respectively. One implication is that the percentage of the population with private health insurance in the United States should continue to decline in the future if real premiums persistently grow significantly faster than the overall economy.     

Commodity Bonds and Consumption Risks

This paper analyzes the economic role of commodity bonds by examining the nature of the demand for these securities. I show that while commodity bonds protect against relative price changes, they do so by introducing variability into the future real income stream. This variability limits the desirability of using commodity bonds to provide “price insurance” for future consumption. However, this variability may allow commodity bonds to hedge risks to consumption caused by stochastic changes in income. The analysis also suggests that it is this “income insurance” rather than “price insurance” that is important in hedging risks to future consumption.     

商业健康险税收优惠政策的效果分析--基于需求价格弹性的测算

本文基于经典商业健康险需求理论的价格弹性模型,分别利用天津市调研数据和中山大学劳动力动态调查数据库测算了按收入分层的商业健康险需求价格弹性及商业健康险的消费结构。并基于上述测算结果,通过数据库对接推算了全国商业健康险的需求价格弹性和税优政策的预期效果。测算结果表明,我国商业健康险的需求价格弹性为-0.22,在当前的税优政策下,个税税改前后,税优健康险的预期年保费规模分别为16.54亿元、6.09亿元,由此带来的年税式支出预计将分别达到2.47亿元、0.69亿元。最后,基于实证分析结果,本文对税优健康险未来的政策调整方向提供了建议。     

Insurance-adjusted valuation,decision making,and capital return

Although the insurance industry has a significant economic role, few theoretical studies link insurance with the overlapping generations economy. This study suggests a new overlapping generations model that includes insurance in the agents' economic decisions under the uncertainty of financial losses. In this insurance model, we derive risk-averse workers' optimal insurance purchases and consumption based on the insurance-adjusted valuations, which are the present value of the income streams minus insurance premiums paid in the future. The theoretical equilibrium model predicts capital returns, wealth, labor supply, etc. Our findings show that higher workforce and technological progress increase private insurance demand and reduce the capital-output ratio, and higher losses as a fraction of output increase social insurance demand and reduce the capital-output ratio via numerical comparative statics.     

An Analysis of the Demand for Earthquake Insurance

This research examines the decision to purchase earthquake insurance by analyzing data on earthquake insurance price and penetration in the New Madrid fault zone in Missouri. Earthquake risk is of concern to consumers, the insurance industry, industry regulators, and government agencies because of the potentially catastrophic nature of losses resulting from a major earthquake. Despite the significance of the earthquake peril, the recent literature does not contain estimates of the price and income elasticity of the demand for earthquake insurance. Our analysis indicates that homeowners acquire earthquake insurance because of risk considerations, at higher levels of risk the demand for earthquake insurance is higher, and the price of earthquake coverage does not provide incremental information in explaining the demand for earthquake coverage.     

Deposit Insurance, Capital Adequacy Requirements and Interest Rate Dynamics

This paper examines the long run interaction among deposit insurance, bank deposit rates and capital adequacy requirements. Using analysis similar to the price discrimination model of Lott and Roberts (1991) we find that a competitive environment among banks would link the spread between insured and uninsured deposit rates to the size of the insurance premium. We also find that banks that choose to operate at the regulatory minimum capital level, would increase asset risk with increased capital requirements if (1) the implicit interest paid to insured and uninsured depositors is equally sensitive to changes in risk and capital adequacy and (2) the insurance premium is independent of the level of risk and capital adequacy. Under the present risk-based premium structure, asset risk has the potential to decline when the regulatory agency raises capital requirements. Finally, we examine the time series behavior of insured and uninsured interest rates to see if it is consistent with our theoretical model. We find that insured and uninsured rates, along with deposit insurance premiums, are cointegrated series as suggested by our model.     

Price and income elasticities of demand for modern health care: the case of infant delivery in the Philippines.

In the Philippines most women choose to deliver at home despite the presence of modern facilities. Policy-making requires a knowledge of the factors that determine that choice, especially in terms of variables like price and location, which are amenable to policy intervention. Over 2/3 of the babies born in low-income countries are delivered by traditional birth attendants who are uneducated and have no formal training. They are, however, available in rural areas, whereas 70-90% of the modern practitioners are in the cities. Recently efforts have been made to expand modern obstetrical services in developing countries, but few surveys are available documenting the impact of modern facilities on delivery patterns. The present survey collected data from 3075 women who had singleton births on the island of Cebu between 1983 and 1984, as well as data from 48 modern public and private health facilities and 88 modern and traditional health practitioners. For the analysis of these data an economic demand model was built, using the mixed multinomial logit technic to estimate relationships between delivery characteristics, mothers' characteristics, and delivery choice. Money prices were not a significant factor in the choices, but time prices were a significant consideration for the rural sample. Hours of availability were a significant factor for both urban and rural mothers, and availability of drugs was significant for the urban sample. Both rural and urban women preferred delivery by a midwife, trained or not, to delivery by a combination of doctors, nurses, and midwives. With few exceptions, income was not a significant factor, and having insurance (10% of the sample) increased the probability of choosing a modern private practitioner. Money price effects were inelastic; i.e., a price increase by modern facilities would not have much effect on the choice of these facilities, and lowering the price of modern public delivery services would do little to increase demand for them. Locating more public practitioners and facilities in rural areas could effectively increase the use of modern facilities by rural women. Both urban and rural women would increase their use of modern public away-from-home facilities if these facilities would increase their hours of operation. Having drugs available would also increase the use of the public away-from-home facilities. In both urban and rural samples, trained midwives were the practitioners of choice. Among rural women a rise in income would increase the likelihood of their choosing public and private away-from-home deliveries and home deliveries by private practitioners. From the point of view of public policy, the most significant implications of the study are: 1) decreasing travel time for rural women by locating modern facilities and practitioners in rural areas would increase the use of modern delivery services; 2) increasing hours of operation, increasing the availability of drugs, and providing trained midwives at public facilities would increase the use of modern delivery services; 3) decreasing money prices would not increase use of modern public delivery services; and 4) increasing the price for cost recovery would not decrease the use of modern public delivery services.     

Flood Insurance Coverage in the Coastal Zone

We explore determinants of flood insurance demand in the coastal zone using micro‐data for nine Southeastern counties. Overall estimates indicate price inelastic demand, though subsidized policyholders have greater coverage and are more price sensitive. Mortgage borrowers exhibit no greater coverage; only 12 percent in 100‐year flood zone indicate flood insurance was required by their lender. Flood insurance demand is increasing in the levels of flood and erosion risk. We find a positive correlation between household income and coverage, but the effect is not monotonic. Community‐level erosion hazard mitigation projects influence flood insurance coverage, with beach replenishment acting as a complement.     

Why small businesses don't have health insurance: results of a Florida survey

While most of the insured population has health insurance under an employer-sponsored group plan, the majority of the working uninsured are employed by small firms. Increasing the number of small firms that provide health insurance plans to their employees is important for decreasing the number of uninsured. This article summarizes the results of a survey designed to study characteristics of the firms that do not have health insurance, the obstacles to their getting insurance, and small business owners' interest in having a group health plan.     

Social long-term care insurance and redistribution

We study the role of social long-term care (LTC) insurance when income taxation and private insurance markets are imperfect. Policy instruments include public provision of LTC as well as a subsidy on private insurance. The subsidy scheme may be linear or nonlinear. For the linear part we consider an arbitrary number of types, characterized by earnings and survival probabilities. In the nonlinear part, society consists of three types: poor, middle class and rich. The first type is too poor to provide for dependence; the middle class type purchases private insurance and the high income type is self-insured. The main questions are at what level LTC should be provided to the poor and whether it is desirable to subsidize private LTC for the middle class. Interestingly, the results are not totally similar under both linear and nonlinear schemes. First, whereas in the linear case a subsidy of private LTC insurance is desirable, it is not in the nonlinear case (at least at the margin). Second, the desirability of public provision of LTC services depends on the way the income tax is restricted. In the linear case, it may be desirable only if no demogrant (uniform lump-sum transfer) is available. In the nonlinear case, public provision is desirable when the income tax is sufficiently restricted. Specifically, this is the case when the income is subject only to a proportional payroll tax while the LTC reimbursement policy can be nonlinear.     

代际转移与商业养老保险对老年收入的影响差异研究

构建混合利他动机和交换动机下的世代交叠模型,研究个人最优消费决策,测算商业养老保险与代际转移对老年收入水平的影响。结果发现：代际转移支付比例提高会减少商业养老保险的购买,进而降低老年收入水平,与其他因素相比,保险价格变动对保险需求的影响最明显。鉴于此,应丰富居民投资结构,建设高质量的教育体系,发挥家庭养老除代际转移支付之外的多样化功能,同时通过供给侧降费推动居民参与商业养老保险。     

汽油价格上涨对北京私家车使用的影响

应用logistic回归模型,根据对北京私家车主问卷调查所得数据,研究了私家车主开始减少私家车使用的油价问题。结果显示,私家车主对油价的反应主要受收入和行驶里程的影响,家庭年人均收入越高、年均行驶里程越长,车主对油价上涨的敏感度越低;同时利用研究出的模型预测了油价上涨到10元时不同收入和年均行驶里程的车主开始减少私家车使用的概率。     

Income heterogeneity and index insurance demand

Weather index insurance as a tool to insure the income of agriculturally active households has triggered extensive discussions in the literature. Despite the convincing theoretical argumentation, the demand for these products stays behind expectations. Several studies revealed effects impacting the demand for index insurance, such as liquidity constraints, basis risk, lack of understanding and trust in insurers and products alike. This paper takes a different perspective and hypothesizes that low demand is due to heterogeneous risk exposure towards weather variability among potential insured. The paper tests the impact of income heterogeneity as a measure of risk exposure on insurance demand and finds that risk exposure negatively affects insurance demand. In order to increase demand, it is concluded that product design should emphasize more the importance of income risk composition and exposure of potentially insured.     

Wealth, Income, and Optimal Insurance

This article considers the decision to purchase insurance against possible losses of a property or wealth. The decision involves a standard economic trade‐off between the benefit of protection against loss and the cost of insurance premium. The premium is paid out of the income and decreases the consumption of other goods and services, rather than out of wealth and decreases the property or wealth. The demand for insurance depends mainly on the income and preferences. As a result, unlike in the standard model, a fair premium is neither necessary nor sufficient for the optimality of full coverage insurance. Rather, the individuals with higher incomes purchase full coverage insurance even at unfair prices of insurance while the individuals with lower income purchase partial coverage insurance at a fair price.     

北京市城镇无保障老人养老保险问题研究

近年来,城镇无保障老年人的养老问题日益受到政府和社会的关注。全国已有部分省市对城镇无保障老年人提供了一定的养老补贴待遇,但是,不同省市采用补贴形式各不相同,补贴标准也有一定的差异。目前,北京市城镇无保障老人主要是通过福利养老金制度覆盖,对满足年龄条件的无保障老人,每人每月都可以领取230元财政补贴。那么,在政府财力有限的条件下,如何提高无保障老人收入水平?本文提出了建立无保障老人个人缴费与政府补贴相结合的新制度,并依据2007年北京市城镇无保障老人调查数据,构建北京市无保障老人养老保险收支模型,计算并预测了未来10年的养老保险收支情况,通过这一模式表明,政府财政补贴在适度提高的前提下,无保障老人养老待遇会有较大幅度增加,而且该模式运行的稳定性较强。     

Marktversagen auf dem geförderten Pflegezusatzversicherungsmarkt?

This study analyzes the supply side of the private German long term care insurance market. It compares loads and comprehensiveness of subsidized and unsubsidized insurance policies for three age groups. The results show that subsidized insurance policies are less comprehensive than unsubsidized insurance policies. In addition the premiums of subsidized policies are marked up substantially above expected benefits compared to unsubsidized policies. All in all these results indicate market failure due to adverse selection within the subsidized private long term care insurance market. Furthermore, the results show that due to unisex pricing, private long term care policies are in general more attractive to women than to men. As this is not reflected in demand, other factors than supply side failure seem to contribute to an overall low demand for private long term care insurance policies.     

The Risk‐Sharing Implications of Disaster Insurance Funds

We study the risk‐sharing implications that arise from introducing a disaster insurance fund to the cat insurance market. Such a form of intervention can increase efficiency in the private market, and our design of disaster insurance suggests a prominent role of catastrophe reinsurance. The model predicts buyers will increase their demand in the private market, and the seller will lower prices to such an extent that their revenues decrease upon introduction of disaster insurance. We test two predictions in the context of the Terrorism Risk Insurance Act (TRIA). It is already known that the introduction of TRIA led to negative abnormal returns in the insurance industry. In addition, we show this negative effect is stronger for larger and for low‐risk‐averse firms—two results that are consistent with our model. The seller’s risk aversion plays an important role in quantifying such feedback effects, and we point toward possible distortions in which a firm may even be overhedged upon introduction of disaster insurance.     

Homeowners Insurance With Bundled Catastrophe Coverage

We estimate the demand for homeowners insurance in Florida and New York with indicated loss costs as our proxy for the quantity of real insurance services demanded. We decompose the demand into the demand for coverage of catastrophe perils and the demand for noncatastrophe coverage and estimate these demand functions separately. Our results are relatively consistent in New York and Florida, including evidence that catastrophe demand is more price elastic than noncatastrophe demand. We also find evidence that consumers value options that expand coverage, buy more insurance when it is subsidized through regulatory price constraints, and consider state guaranty fund provisions when purchasing insurance.     

Social insurance,incentives and risk taking

From the perspective of parents, redistributive taxation can be seen as social insurance for their children, for which no private alternative exists. Because private insurance comes too late during a person's life, it cannot cover the same risks as social insurance. Empirically, 85% of social insurance covers risks for which no private insurance would have been available. Redistributive taxation can be efficiency enhancing, because it creates safety and because it stimulates income generating risk taking. However, it also brings about detrimental moral hazard effects. Both the enhancement of risk taking and the moral hazard effects tend to increase the inequality in the economy, and, under constant returns to risk taking, this increase is likely to be strong enough even to make the net-of-tax income distribution more unequal. Optimal redistributive taxation will either imply that the pie becomes bigger when there is less inquality in pre-tax incomes or that more redistribution creates more post-tax inequality.The author gratefully acknowledges reserach assistance by Claudio Thum and useful comments by two anonymous referees. The paper is a broadened and non-technical discussion that draws on previous writings by the author on the subject. See in particular Sinn (1995).