Adverse Selection in Health Insurance Markets: A Classroom Experiment

Adverse selection as it relates to health care policy will be a key economic issue in many upcoming elections. In this article, the author lays out a 30-minute classroom experiment designed for students to experience the kind of elevated prices and market collapse that can result from adverse selection in health insurance markets. The students should come away from the experiment understanding why adverse selection leads to high prices on good quality insurance and why it forces healthy individuals into low quality plans. Additionally, the experiment helps students think about the market characteristics that make health insurance particularly vulnerable to problems of asymmetric information. Finally, the experiment connects the adverse selection problem with key features of the 2010 Patient Protection and Affordable Care Act.     

Efficient Transfer of Aging Provisions in Private Health Insurance

In German-style private health insurance contracts, aging provisions are used to flatten premium profiles. An individual would like to change insurer if she perceives a low service quality. The first-best optimum is characterized by provision transfers upon insurer changes which are higher for high risks and may be negative for low risks. Should the actual risk status not be verifiable, provision transfers have to be uniform. Efficient transfers will equalize consumption across periods and states if high risks are deterred from switching. Otherwise, the optimum transfer balances the distortion of incentives for high-risk and low-risk individuals.     

Health Insurance, Liquidity and Growth

Within the context of an endogenous growth model, it is shown that in the presence of health risks which influence household income, the introduction of a private insurance company increases the long-term economic growth rate. The introduction of such an institution has two effects on savings: a level effect and a composition effect. Although the presence of this risk-reducing institution induces a decrease in the level of total savings, as suggested in earlier papers, the rate of illiquid savings, which contribute to growth, increases.
JEL Classification E 1; G 2; O 1; O 4     

城镇低保户医疗服务利用和医疗保障制度设计对就医行为的影响——基于兰州、西宁和白银城镇家庭调查数据的分析

解决低保户看病难问题事关社会底线公平。文章基于2005年三个西北城市的17 690个样本对低保户就医问题展开实证研究,分析结果表明,由于中国医疗机构扭曲的激励机制和偏重住院报销的给付结构,低保户和非低保户两个群体都倾向于自己购药处理日常病患,而减少了门诊利用,经常面临生存危机的低保户由此拖延病情直至病情严重;个人账户既不能横向分散不同人群的疾病风险,也不能纵向分散个人在生命周期不同阶段的疾病风险;职工基本医疗保险能够显著增加中青年低保户对住院服务的利用,但对老龄低保户没有效果。     

区域寿险和非寿险与经济增长的关系研究——基于新疆的实证分析

本文以新疆1980年-2008年的财产保险保费收入、人身保险保费收入和GDP数据的对数值为依据,进行实证分析。通过分析认为,新疆财产保险发展、人身保险发展与经济增长存在正相关关系;新疆财产保险业发展与经济增长存在协整关系,而人身保险与经济增长不存在协整关系;短期内财产保险、寿险都不是经济增长的Granger原因,但经济增长却是财产保险和寿险发展的Granger原因,而从长期来看,寿险的增长可能是经济增长的Granger原因。     

Transferable Ageing Provisions in Individual Health Insurance Contracts

Abstract. We consider lifetime health insurance contracts in which ageing provisions are used to smooth the premium profile. The capital stock accumulated for each individual can be decomposed into two parts: a premium insurance and an annuitized life insurance, only the latter being transferable between insurers without triggering premium changes through risk segmentation. In a simulation based on German data, the transferable share declines in age and falls with an increasing age of entry into the contract. In spite of different benefit profiles, it is almost identical for women and men.     

Precautionary Saving and Health Insurance: A Portfolio Choice Perspective

This paper analyzes the impact of health insurance on household portfolio choice. Using the U.S. Survey of Consumer Finance and Health Retirement Survey databases, it finds that insured households are more likely to own stocks and invest a larger proportion of financial assets in stocks than uninsured households do. The results remain strong even after controlling for household characteristics and reverse causality. Further, the results are robust across different survey years and data sources. It suggests that a precautionary motive is strong in household portfolio choice decisions.     

Asymmetric Information,Auditing Commitment,and Economic Growth

We analyze in this paper the growth and welfare consequences stemming from the lack of auditing commitment in a credit market with costly state verification. By studying two endogenous growth models, one of which allows lenders to commit to costly auditing strategies, whereas the other does not, we show that the inability to commit serves as a source of informational friction that results in more stringent contractual terms, which, in turn, result in lower capital accumulation, growth, and welfare. From the policy perspective, our analysis suggests a new micro‐economic channel through which institutional failings hinder economic growth and social welfare.     

Health,Social Insurance and Income

Health, a form of human capital, can be defined by longevity and physical wellbeing. Social policy decisions require an understanding of the factors that contribute to the creation of health inequalities. To learn more about socioeconomic variables and health capital, this paper examines the relationship between three key variables: health, social insurance, and income, for the Swedish population. Using a randomized research survey design, data from 3,600 participants of a larger Swedish study, conducted in 2005, was analyzed. A linear model of Three Stage Least Squares was chosen to correct for simultaneous bias in the Health, Social Insurance, and Income (HSI) Model. Findings confirm the importance of socioeconomic, behavioral and environmental factors in explaining health inequalities. The results clearly show men, educated people, nonsmokers, individuals that exercise and youngsters possess higher health status than other people. The dependency on social insurance is mainly caused by poor health; a higher degree of social insurance dependency was offset by income increases due to age and higher professional level.      

Bank Mergers, Information, Default and the Price of Credit

This paper addresses the impact of bank mergers on the price of firm credit, through an information channel. It is shown that, as bank mergers imply a wider spreading of information among banks concerning firms' past defaults, they may increase the expected revenue from lending. Therefore, interest rates may decline as long as a sufficiently competitive environment is preserved. A fall in interest rates, in turn, reduces the incentives for firms to strategically default, which reinforces the downward effect on the price of credit. The results are a function of the level of information sharing and of the sensitivity of the default probability to the interest rate .     

Managerial risk-taking incentives, product market competition and welfare

Managers’ compensation may increase with the variance of the firm's profits. This paper investigates how this affects their choice of strategic variables, and how that affects managerial compensation. The social welfare aspects of this interaction are analyzed in a duopoly setting with uncertain linear demand and linear marginal cost. Compared to a situation in which the managers’ compensation does not depend on the variance of profits, social welfare may be either higher, lower, or remain unaffected, depending on the slope of the marginal cost curve and whether the competing firms produce goods that are demand substitutes or complements.     

Bilateral Oligopoly,Private Information,and Pollution Permit Markets

We analyze the effects of strategic behavior and private information in pollution permit markets in which all firms have market power. The market is characterized by supply-function equilibria. Firms submit net supplies for permits and a market maker determines the market-clearing price. Net supplies depend on abatement cost functions, which in turn depend on private information parameters. We calculate the increase in aggregate abatement costs due to strategic behavior and private information and show that private information attenuates the effects of strategic behavior.      

Price Discrimination with Private and Imperfect Information

In this paper, I investigate the competitive and welfare effects of the improvements in information accuracy in markets where firms can price discriminate after observing a private and noisy signal about a consumer's brand preference. I show that when firms believe that consumers have a brand preference for them, then they charge more to these consumers, and this price has an inverse U‐shaped relationship with the signal's accuracy. In contrast, the price charged after a disloyal signal has been observed falls as the signal's accuracy rises. While industry profit and overall welfare fall monotonically when price discrimination is based on increasingly more accurate information, the reverse happens to consumer surplus.     

医疗保险与城乡反贫困:1989-2006

文章利用中国健康与营养调查(CHNS)数据,估计了1989-2006年医疗保险对中国城乡家庭的反贫困效应。结果发现:发生灾难性卫生支出的城乡家庭比例较高,最穷的群体其医疗费用超过收入的比例增加,医疗保险对减少收入不平等只起到微弱作用。TIP贫困曲线表明,近几年,医疗保险补偿后,城乡患病家庭的贫困并没有减轻,医疗保险在减少贫困上的作用很小。分析贫困特征的多元回归模型显示,家庭成员数量、教育程度、抚养比率、参保人数等都影响了贫困,而条件多元回归模型则显示,医疗保险对贫困的变动没有影响。     

Health Policy and Equity of Health Care Financing in Australia: 1973–2010

Using data from Australian Taxation Statistics and Household Expenditure Surveys we analyze the distribution of health care financing in Australia over almost four decades. We compute Kakwani Progressivity indices for four sources of health care financing: general taxation, Medicare Levy payments, Medicare Levy Surcharge payments, and direct consumer payments, and estimate the effects of major policy changes on them. The results demonstrate that the first three of these sources of health care financing are progressive in Australia, while the distribution of direct payments is regressive. Surprisingly, we find that neither the introduction of Medicare in Australia in 1984 nor the Extended Medicare Safety Net in 2004 had significant effects on the progressivity of health care financing in Australia. By contrast, the Lifetime Cover scheme—introduced in 2000 to encourage people to buy and hold private health insurance—had a progressive effect on health care financing.     

长期护理保险在山西的市场调查与发展对策研究

因家庭养老功能的弱化、护理费用的高涨及现有社会保障制度的不完善,使得长期护理保险自面世以来倍受人们的关注.这一保险产品目前在山西存在巨大的有效需求,而市场供给却为空白,巨大的供需缺口孕育着巨大的市场潜力.为此保险公司应结合山西地区发展实际,有针对性地改造现有产品,开发新产品,政府也应给予适当的财税优惠政策,并最终应将长期护理保险纳入社会保险范畴.     

农民工职业风险、工伤保险与教育补贴的政策效应

农民工工伤保险和农民工教育补贴新政策引人瞩目。文章考虑两部门(农民工和政府)、两时期(教育投资期和工作期)经济,构造基于职业风险、并纳入新政策变量的效用函数,通过局部均衡和比较静态分析揭示新政策效应。结论表明:“理性选择”是农民工微观行为决策的特征雏型;农民工工伤保险制度实现了高、低风险职业福利的再分配;教育投资提升了社会效率,但均衡是帕累托次优状态;而农民工教育补贴政策的介入,则实现着帕累托改进的动态过程。农民工工伤保险和教育补贴政策的有机搭配,诠释着公平与效率并重的和谐政策艺术,动态支撑着公平与效率的平衡。     

Pollution,Private Investment in Healthcare,and Environmental Policy*

In this paper, we demonstrate that, in a two‐period overlapping‐generations model, the relationship between environmental taxation and economic activity (output level and growth) has an inverted‐U shape when we take into account the detrimental impact of pollution on health and the individual decision of each working‐age agent to improve her health. We also demonstrate that the link between environmental tax and lifetime welfare also has an inverted‐U shape, and that a tighter environmental policy might enhance economic activity while reducing steady‐state lifetime welfare. Finally, we investigate the social optimum and the determinants of the optimal environmental tax.     

Information Asymmetries and Risk Management in Healthcare Markets: The U.S. Affordable Care Act in Retrospect

This article critically examines the pertinent issues in ex ante and ex post moral hazard in healthcare markets, with the U.S. Affordable Care Act (ACA) as its focal point of inquiry. First, it compares the various types of information asymmetries resulting from the production, allocation, and utilization of health insurance. Second, it reviews the literature on adverse selection, moral hazard, and risk mitigation against which salient ACA reforms are analyzed. In contrasting conventional moral hazard from an alternative theory of welfare maximization, it suggests that healthcare (over)utilization cannot necessarily be considered wasteful, even if it ends up costing insurers more on a short-term basis. Costs and savings attributable to healthcare spending under the ACA will vary between the consumer, insurer, and regulator-subsidizer. Despite the ambiguities surrounding definitions of “health,” the challenge of containing inefficient moral hazard, and encouraging its desirable counterpart, lies in the tradeoffs that arise between consumer access to affordable and quality healthcare and the market competitiveness of health insurers. The new Trump administration will have to address these tradeoffs in repealing and replacing the ACA, particularly in light of escalating insurance premiums and deductibles, narrower provider networks, and technical implementation issues.     

Bequest Motives and the Demand for Life Insurance in East Germany

Empirical studies of household saving remain inconclusive about the role of bequest motives. This may be due to the diluting effect of different tax regimes across countries and time on estimates of bequest motives. Relative to market‐based economies, the former German Democratic Republic can be viewed as an experimental institutional setting where life‐insurance demand was not influenced by tax considerations. This allows isolating bequest motives from other life‐cycle and precautionary savings motives. Analyzing the demand for life insurance, we find a significantly higher ownership probability among households with children and a high regard for the family, confirming bequest motives in life‐insurance demand.