How do environmental conditions influence the purchase of critical illness insurance, and why? The mechanism for any potential relationship between them has substantial welfare and policy implications. Prior literature has found a positive relationship between supplementary health insurance and pollution in selected major cities in China. By examining nationwide serious illness insurance purchases under fluctuating air pollution levels across 258 cities in China from 2012 to 2016, we confirm a robust positive relationship between air pollution levels and insurance purchase timing, which is in line with the prior finding. However, we further hypothesize and empirically test whether indicators of public attention drive this result. Localized internet search data shows that search frequencies for the “harmful effects of pollution” and related search terms are highly correlated with recent local air pollution levels. In addition, the level of news media coverage about air pollution sharply reduces the significance of the air pollution-critical illness insurance purchase relationship, showing that attention to pollution-related news drives this effect. The attention effect is also confirmed by comparing the influence of AQI variables as opposed to API, an earlier version of a pollution index which was not made widely available to the public. Furthermore, a survey of potential insurance consumers shows that current local air pollution does not influence individuals’ beliefs about future pollution in China, contributing to doubts about a projection-bias explanation of insurance purchase, previously discussed in the literature. Altogether, our evidence points to attention towards pollution as the primary reason for increased purchase of serious illness insurance during high air pollution time intervals.
{"title":"A reminder in the air: Attention to pollution and the purchase of critical illness insurance","authors":"Feng Gao, J. Lien, Jun Wang, Qian Wang, Jie Zheng","doi":"10.2139/ssrn.3926974","DOIUrl":"https://doi.org/10.2139/ssrn.3926974","url":null,"abstract":"How do environmental conditions influence the purchase of critical illness insurance, and why? The mechanism for any potential relationship between them has substantial welfare and policy implications. Prior literature has found a positive relationship between supplementary health insurance and pollution in selected major cities in China. By examining nationwide serious illness insurance purchases under fluctuating air pollution levels across 258 cities in China from 2012 to 2016, we confirm a robust positive relationship between air pollution levels and insurance purchase timing, which is in line with the prior finding. However, we further hypothesize and empirically test whether indicators of public attention drive this result. Localized internet search data shows that search frequencies for the “harmful effects of pollution” and related search terms are highly correlated with recent local air pollution levels. In addition, the level of news media coverage about air pollution sharply reduces the significance of the air pollution-critical illness insurance purchase relationship, showing that attention to pollution-related news drives this effect. The attention effect is also confirmed by comparing the influence of AQI variables as opposed to API, an earlier version of a pollution index which was not made widely available to the public. Furthermore, a survey of potential insurance consumers shows that current local air pollution does not influence individuals’ beliefs about future pollution in China, contributing to doubts about a projection-bias explanation of insurance purchase, previously discussed in the literature. Altogether, our evidence points to attention towards pollution as the primary reason for increased purchase of serious illness insurance during high air pollution time intervals.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116698272","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study how inertia interacts with market power and adverse selection in managed competition health insurance markets. We use consumer-level data to estimate a model of the California ACA exchange, in which four firms dominate the market and risk adjustment is in place to manage selection. We estimate high inertia costs, equal to 44% of average premiums. Although eliminating inertia exacerbates adverse selection, it significantly reduces market power such that average premiums decrease 13.2% and annual per-capita welfare increases $902. These effects are substantially smaller in settings without market power and/or risk adjustment. Moreover, converting the ACA's premium-linked subsidies to vouchers mitigates the impact of inertia by reducing market power, whereas reducing high consumer churn in the ACA exchanges increases the impact of inertia by enhancing market power. The impact of inertia is not sensitive to provider network generosity, despite greater consumer attachment to plans with more differentiated provider networks.
{"title":"Inertia, Market Power, and Adverse Selection in Health Insurance: Evidence from the ACA Exchanges","authors":"E. Saltzman, A. Swanson, D. Polsky","doi":"10.2139/ssrn.3908686","DOIUrl":"https://doi.org/10.2139/ssrn.3908686","url":null,"abstract":"We study how inertia interacts with market power and adverse selection in managed competition health insurance markets. We use consumer-level data to estimate a model of the California ACA exchange, in which four firms dominate the market and risk adjustment is in place to manage selection. We estimate high inertia costs, equal to 44% of average premiums. Although eliminating inertia exacerbates adverse selection, it significantly reduces market power such that average premiums decrease 13.2% and annual per-capita welfare increases $902. These effects are substantially smaller in settings without market power and/or risk adjustment. Moreover, converting the ACA's premium-linked subsidies to vouchers mitigates the impact of inertia by reducing market power, whereas reducing high consumer churn in the ACA exchanges increases the impact of inertia by enhancing market power. The impact of inertia is not sensitive to provider network generosity, despite greater consumer attachment to plans with more differentiated provider networks.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128309770","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. Atal, José Ignacio Cuesta, Felipe González, Cristóbal Otero
Author(s): Otero, Cristobal; Cuesta, Jose Ignacio; Atal, Juan Pablo; Gonzalez, Felipe | Abstract: We study the economic and political effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile around local elections. Public pharmacies sell drugs at a third of private pharmacy prices, because of a stronger upstream bargaining position and downstream market power in the private sector, but are also of lower quality. Exploiting a field experiment and quasi-experimental variation, we show that public pharmacies affected consumer shopping behavior, inducing market segmentation and price increases in the private sector. This segmentation created winners and losers, as consumers who switched to public pharmacies benefited, whereas consumers who stayed with private pharmacies were harmed. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent, which outweighs the costs of the policy by 52 percent. Mayors that introduced public pharmacies received more votes in the subsequent election, particularly by the target population of the policy.
{"title":"The Economics of the Public Option: Evidence from Local Pharmaceutical Markets","authors":"J. Atal, José Ignacio Cuesta, Felipe González, Cristóbal Otero","doi":"10.2139/ssrn.3821885","DOIUrl":"https://doi.org/10.2139/ssrn.3821885","url":null,"abstract":"Author(s): Otero, Cristobal; Cuesta, Jose Ignacio; Atal, Juan Pablo; Gonzalez, Felipe | Abstract: We study the economic and political effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile around local elections. Public pharmacies sell drugs at a third of private pharmacy prices, because of a stronger upstream bargaining position and downstream market power in the private sector, but are also of lower quality. Exploiting a field experiment and quasi-experimental variation, we show that public pharmacies affected consumer shopping behavior, inducing market segmentation and price increases in the private sector. This segmentation created winners and losers, as consumers who switched to public pharmacies benefited, whereas consumers who stayed with private pharmacies were harmed. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent, which outweighs the costs of the policy by 52 percent. Mayors that introduced public pharmacies received more votes in the subsequent election, particularly by the target population of the policy.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131611072","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aims of the paper is to observe the level of awareness on health insurance among the university teachers in Pokhara valley. The study has followed descriptive and cross sectional research design. Primary data have been obtained administering structured questionnaire among the 150 teachers of university and constituent campus of Pokhara University located in Kaski District. Chi Square test, Mann Whitney and Kruskal Wallis Test have been used to test the hypothesis. The study concludes that majority of the respondents are aware about the government health insurance program launched in the country. The opinion regarding the health awareness and knowledge on health insurance is most associated with ethnicity and least associated with sex and marital status, and moderately associated with age and educational level.
{"title":"Health Insurance Awareness Among the University Teachers in Pokhara Valley","authors":"Rabindra Ghimire","doi":"10.2139/ssrn.3213732","DOIUrl":"https://doi.org/10.2139/ssrn.3213732","url":null,"abstract":"The aims of the paper is to observe the level of awareness on health insurance among the university teachers in Pokhara valley. The study has followed descriptive and cross sectional research design. Primary data have been obtained administering structured questionnaire among the 150 teachers of university and constituent campus of Pokhara University located in Kaski District. Chi Square test, Mann Whitney and Kruskal Wallis Test have been used to test the hypothesis. The study concludes that majority of the respondents are aware about the government health insurance program launched in the country. The opinion regarding the health awareness and knowledge on health insurance is most associated with ethnicity and least associated with sex and marital status, and moderately associated with age and educational level.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121067329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The duties of a bodily injury (BI) carrier and an underinsured motorist (UIM) carrier are patently different. The BI carrier has the “duty to defend” and to “exercise good faith,” while the UIM carrier does not have this responsibility. As a result of the inherently different protections of BI coverage and UIM coverage, “[w]hen tort litigation ensues, the liability insurer is the insured’s defender; the [UIM] insurer is the insured’s adversary.” Although the UIM carrier does not have the same obligation in conducting settlement negotiations as the BI carrier, does the UIM carrier have a duty to make a settlement offer to the insured before judgment is entered against the at-fault party? In the past, the UIM carrier’s obligation to make a settlement offer was prompted only by judgment—as opposed to being prompted by the BI carrier’s settlement offer or payment of policy limits to the insured. This Note affords insight into the problem and provides guidance for good faith UIM claims handling.
{"title":"Virginia Auto Insurers Tread Softly: An Underinsured Motorist Carrier's Good Faith Duty (or Lack Thereof) before Judgment","authors":"Patrick M Hagen","doi":"10.2139/SSRN.2997133","DOIUrl":"https://doi.org/10.2139/SSRN.2997133","url":null,"abstract":"The duties of a bodily injury (BI) carrier and an underinsured motorist (UIM) carrier are patently different. The BI carrier has the “duty to defend” and to “exercise good faith,” while the UIM carrier does not have this responsibility. As a result of the inherently different protections of BI coverage and UIM coverage, “[w]hen tort litigation ensues, the liability insurer is the insured’s defender; the [UIM] insurer is the insured’s adversary.” Although the UIM carrier does not have the same obligation in conducting settlement negotiations as the BI carrier, does the UIM carrier have a duty to make a settlement offer to the insured before judgment is entered against the at-fault party? In the past, the UIM carrier’s obligation to make a settlement offer was prompted only by judgment—as opposed to being prompted by the BI carrier’s settlement offer or payment of policy limits to the insured. This Note affords insight into the problem and provides guidance for good faith UIM claims handling.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"214 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116427503","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Alvaro J. Riascos, Natalia Serna Borrero, Ramiro Guerrero
Defining optimal capital requirements for health insurers is a matter of interest for policy-makers. They determine the insolvency probability of health insurers and the minimum number of enrolees in order to keep insolvency under control. In this paper we develop a methodology for estimating the expected loss per health insurer after considering their specific risk profile and the capitation formula with which they are paid. We assume the expected loss follows a normal distribution within risk pools consisting of a unique combination of long-term disease, age, gender, and location, and then define the minimum capital requirement as the 1st quantile of the loss distribution. An application is made for insurers in the statutory health care system of Colombia. Our results show that under normal expenditures with ex-ante morbidity risk adjustment using long-term disease groups, if capitation payments were conditional on long-term diseases too, riskier insurers should have significantly higher capital requirements compared to those generated by the current government capitation formula, which reimburses only on demographic variables, while less risky insurers should have lower capital requirements.
{"title":"Capital Requirements of Health Insurers Under Different Risk-Adjusted Capitation Payments","authors":"Alvaro J. Riascos, Natalia Serna Borrero, Ramiro Guerrero","doi":"10.2139/ssrn.2912942","DOIUrl":"https://doi.org/10.2139/ssrn.2912942","url":null,"abstract":"Defining optimal capital requirements for health insurers is a matter of interest for policy-makers. They determine the insolvency probability of health insurers and the minimum number of enrolees in order to keep insolvency under control. In this paper we develop a methodology for estimating the expected loss per health insurer after considering their specific risk profile and the capitation formula with which they are paid. We assume the expected loss follows a normal distribution within risk pools consisting of a unique combination of long-term disease, age, gender, and location, and then define the minimum capital requirement as the 1st quantile of the loss distribution. An application is made for insurers in the statutory health care system of Colombia. Our results show that under normal expenditures with ex-ante morbidity risk adjustment using long-term disease groups, if capitation payments were conditional on long-term diseases too, riskier insurers should have significantly higher capital requirements compared to those generated by the current government capitation formula, which reimburses only on demographic variables, while less risky insurers should have lower capital requirements.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"54 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134140479","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the impact of the Affordable Care Act’s (ACA’s) dependent coverage mandate on health insurance coverage rates and health care utilization among young adults. Using data from the Medical Panel Expenditure Survey, I exploit the discontinuity in health insurance coverage rates at age 26, the new dependent coverage age cutoff enforced by the ACA. Under alternative regression discontinuity design models, I find that 2.5% to 5.3% of young adults lose their health insurance coverage once they turn 26. This effect is mainly driven by those who lose their private health insurance plan coverage and those who lose their health insurance plan coverage, whose main holder resides outside of the household. I also find that the discrete change in health insurance coverage rates at age 26 is associated with significant changes in office-based physician and dental visits, but does not have a significant impact on the utilization of outpatient or emergency department services. Furthermore, the effects of the ACA’s dependent coverage mandate on health care spending and out-of-pocket costs are insignificant. These results are robust under alternative model specifications.
{"title":"Health Insurance Coverage and Health Care Utilization: Evidence from the Affordable Care Act's Dependent Coverage Mandate","authors":"Baris Yoruk","doi":"10.2139/ssrn.2912958","DOIUrl":"https://doi.org/10.2139/ssrn.2912958","url":null,"abstract":"This paper investigates the impact of the Affordable Care Act’s (ACA’s) dependent coverage mandate on health insurance coverage rates and health care utilization among young adults. Using data from the Medical Panel Expenditure Survey, I exploit the discontinuity in health insurance coverage rates at age 26, the new dependent coverage age cutoff enforced by the ACA. Under alternative regression discontinuity design models, I find that 2.5% to 5.3% of young adults lose their health insurance coverage once they turn 26. This effect is mainly driven by those who lose their private health insurance plan coverage and those who lose their health insurance plan coverage, whose main holder resides outside of the household. I also find that the discrete change in health insurance coverage rates at age 26 is associated with significant changes in office-based physician and dental visits, but does not have a significant impact on the utilization of outpatient or emergency department services. Furthermore, the effects of the ACA’s dependent coverage mandate on health care spending and out-of-pocket costs are insignificant. These results are robust under alternative model specifications.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"28 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-01-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126117718","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
BACKGROUND National/social health insurance schemes have increasingly been seen in many low- and middle-income countries (LMICs) as a vehicle to universal health coverage (UHC) and a viable alternative funding mechanism for the health sector. Several countries, including Ghana, have thus introduced and implemented mandatory national health insurance schemes (NHIS) as part of reform efforts towards increasing access to health services. Ghana passed mandatory national health insurance (NHI) legislation (ACT 650) in 2003 and commenced nationwide implementation in 2004. Several peer review studies and other research reports have since assessed the performance of the scheme with positive rating while challenges also noted. This paper contributes to the literature on economic and political implementation challenges based on empirical evidence from the perspectives of the different category of actors and institutions involved in the process. METHODS Qualitative in-depth interviews were held with 33 different category of participants in four selected district mutual health insurance schemes in Southern (two) and Northern (two) Ghana. This was to ascertain their views regarding the main challenges in the implementation process. The participants were selected through purposeful sampling, stakeholder mapping, and snowballing. Data was analysed using thematic grouping procedure. RESULTS Participants identified political issues of over politicisation and political interference as main challenges. The main economic issues participants identified included low premiums or contributions; broad exemptions, poor gatekeeper enforcement system; and culture of curative and hospital-centric care. CONCLUSION The study establishes that political and economic factors have influenced the implementation process and the degree to which the policy has been implemented as intended. Thus, we conclude that there is a synergy between implementation and politics; and achieving UHC under the NHIS requires political stewardship. Political leadership has the responsibility to build trust and confidence in the system by providing the necessary resources and backing with minimal interference in the operations. For sustainability of the scheme, authorities need to review the exemption policy, rate of contributions, especially, from informal sector employees and recruitment criteria of scheme workers, explore additional sources of funding and re-examine training needs of employees to strengthen their competences among others.
{"title":"The Politico-Economic Challenges of Ghana's National Health Insurance Scheme Implementation","authors":"Adam Fusheini","doi":"10.15171/ijhpm.2016.47","DOIUrl":"https://doi.org/10.15171/ijhpm.2016.47","url":null,"abstract":"BACKGROUND\u0000National/social health insurance schemes have increasingly been seen in many low- and middle-income countries (LMICs) as a vehicle to universal health coverage (UHC) and a viable alternative funding mechanism for the health sector. Several countries, including Ghana, have thus introduced and implemented mandatory national health insurance schemes (NHIS) as part of reform efforts towards increasing access to health services. Ghana passed mandatory national health insurance (NHI) legislation (ACT 650) in 2003 and commenced nationwide implementation in 2004. Several peer review studies and other research reports have since assessed the performance of the scheme with positive rating while challenges also noted. This paper contributes to the literature on economic and political implementation challenges based on empirical evidence from the perspectives of the different category of actors and institutions involved in the process.\u0000\u0000\u0000METHODS\u0000Qualitative in-depth interviews were held with 33 different category of participants in four selected district mutual health insurance schemes in Southern (two) and Northern (two) Ghana. This was to ascertain their views regarding the main challenges in the implementation process. The participants were selected through purposeful sampling, stakeholder mapping, and snowballing. Data was analysed using thematic grouping procedure.\u0000\u0000\u0000RESULTS\u0000Participants identified political issues of over politicisation and political interference as main challenges. The main economic issues participants identified included low premiums or contributions; broad exemptions, poor gatekeeper enforcement system; and culture of curative and hospital-centric care.\u0000\u0000\u0000CONCLUSION\u0000The study establishes that political and economic factors have influenced the implementation process and the degree to which the policy has been implemented as intended. Thus, we conclude that there is a synergy between implementation and politics; and achieving UHC under the NHIS requires political stewardship. Political leadership has the responsibility to build trust and confidence in the system by providing the necessary resources and backing with minimal interference in the operations. For sustainability of the scheme, authorities need to review the exemption policy, rate of contributions, especially, from informal sector employees and recruitment criteria of scheme workers, explore additional sources of funding and re-examine training needs of employees to strengthen their competences among others.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126452044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Deductibles are commonly used to tame increasing health care costs. Numerous studies find that higher deductibles reduce health care utilization. In this paper we compare utilization in Switzerland between two health care plans with deductibles of 1,500 CHF and 2,500 CHF (1CHF approx. 1$) per calendar year. While there is a minimum deductible level in Switzerland, individuals are free to increase their deductible and thereby reduce their insurance premium. In order to distinguish between selection and moral hazard we use regional variation in premiums as an instrument. Moreover, we take advantage of a policy change in 2005 that introduced the higher deductible for the first time. The results show that selection leads to considerable differences in utilization between the two groups, while we find no behavioral differences across both groups. If anything health care expenditures are higher for male individuals with the higher deductible, while for females there are no differences between the two deductible levels.
{"title":"Does it Really Make a Difference? Health Care Utilization with Two High Deductible Health Care Plans","authors":"Stefan Pichler, J. Ruffner","doi":"10.2139/ssrn.2745780","DOIUrl":"https://doi.org/10.2139/ssrn.2745780","url":null,"abstract":"Deductibles are commonly used to tame increasing health care costs. Numerous studies find that higher deductibles reduce health care utilization. In this paper we compare utilization in Switzerland between two health care plans with deductibles of 1,500 CHF and 2,500 CHF (1CHF approx. 1$) per calendar year. While there is a minimum deductible level in Switzerland, individuals are free to increase their deductible and thereby reduce their insurance premium. In order to distinguish between selection and moral hazard we use regional variation in premiums as an instrument. Moreover, we take advantage of a policy change in 2005 that introduced the higher deductible for the first time. The results show that selection leads to considerable differences in utilization between the two groups, while we find no behavioral differences across both groups. If anything health care expenditures are higher for male individuals with the higher deductible, while for females there are no differences between the two deductible levels.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122079469","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We apply mixed proportional hazards models to a Dutch insurer's portfolio of income insurance contracts and show that physical and mental ill-health and bad lifestyle habits generally have adverse effects on self-employed workers' disability outcomes. Yet our main result is that accurate assessment of the relation between health, lifestyle and disability outcomes requires a subgroup analysis that distinguishes several groups of policyholders (such as smokers and non-smokers, overweight and normal-weight self-employed, and men and women). Our study can contribute to more effective underwriting criteria and the development of risk-based insurance premiums, among others.
{"title":"Health, Lifestyle and Disability Transitions of Self-Employed Workers: Evidence from Dutch Insurance Data","authors":"L. Spierdijk, R. van Ooijen, A. van Lomwel","doi":"10.2139/ssrn.2535765","DOIUrl":"https://doi.org/10.2139/ssrn.2535765","url":null,"abstract":"We apply mixed proportional hazards models to a Dutch insurer's portfolio of income insurance contracts and show that physical and mental ill-health and bad lifestyle habits generally have adverse effects on self-employed workers' disability outcomes. Yet our main result is that accurate assessment of the relation between health, lifestyle and disability outcomes requires a subgroup analysis that distinguishes several groups of policyholders (such as smokers and non-smokers, overweight and normal-weight self-employed, and men and women). Our study can contribute to more effective underwriting criteria and the development of risk-based insurance premiums, among others.","PeriodicalId":237817,"journal":{"name":"HEN: Insurance (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127687499","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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