The Effect of State Community Rating Regulations on Premiums and Coverage in the Individual Health Insurance Market

Some states have implemented community rating regulations to limit the extent to which premiums in the individual health insurance market can vary with a person�s health status. Community rating and guaranteed issues laws were passed with hopes of increasing access to affordable insurance for people with high-risk health conditions, but there are concerns that these laws led to adverse selection. In some sense, the extent to which these regulations ultimately affected the individual market depends in large part on the degree of risk segmentation in unregulated states. In this paper, we examine the relationship between expected medical expenses, individual insurance premiums, and the likelihood of obtaining individual insurance using data from both the National Health Interview Survey and the Community Tracking Study Household Survey. We test for differences in these relationships between states with both community rating and guaranteed issue and states with no such regulations. While we find that people living in unregulated states with higher expected expense due to chronic health conditions pay modestly higher premiums and are somewhat less likely to obtain coverage, the variation between premiums and risk in unregulated individual insurance markets is far from proportional; there is considerable pooling. In regulated states, we find that there is no effect of having higher expected expense due to chronic health conditions on neither premiums nor coverage. Overall, our results suggest that the effect of regulation is to produce a slight increase in the proportion uninsured, as increases in low risk uninsureds more than offset decreases in high risk uninsureds. Community rating and guaranteed issue regulations produce only small changes in risk pooling because the extent of pooling in the absence of regulation is substantial.

Health Insurance on the Internet and the Economics of Search

This paper explores the level and dispersion of premiums paid for individual health insurance by comparing asking price' data posted on an electronic insurance exchange with survey data on premiums actually paid in the period just before the advent of electronic exchanges. The primary theoretical question is whether the pattern of differences between asking prices and transactions prices can be explained using a simple search theory. We hypothesize, following suggestions of Stigler and Rothschild, that higher risks who expect to pay higher premiums for a given policy will engage in more intensive search than lower risks, given the same distribution of asking prices. As a result, for a given distribution of asking prices, the dispersion of premiums actually paid (transactions prices) will be smaller for higher risks. Therefore, the introduction of an electronic exchange should have a larger potential influence on the dispersion and level of premiums paid for lower risks than for higher risks. We find evidence consistent with each of these hypotheses.

Construction of Wannier functions from localized atomic-like orbitals

The problem of construction of the Wannier functions (WFs) in a restricted Hilbert space of eigenstates of the one-electron Hamiltonian $\hat{H}$ (forming the so-called low-energy part of the spectrum) can be formulated in several different ways. One possibility is to use the projector-operator techniques, which pick up a set of trial atomic orbitals and project them onto the given Hilbert space. Another possibility is to employ the downfolding method, which eliminates the high-energy part of the spectrum and incorporates all related to it properties into the energy-dependence of an effective Hamiltonian. We show that by modifying the high-energy part of the spectrum of the original Hamiltonian $\hat{H}$, which is rather irrelevant to the construction of WFs in the low-energy part of the spectrum, these two methods can be formulated in an absolutely exact and identical form, so that the main difference between them is reduced to the choice of the trial orbitals. Concerning the latter part of the problem, we argue that an optimal choice for trial orbitals can be based on the maximization of the site-diagonal part of the density matrix. The main idea is illustrated for a simple toy model, consisting of only two bands, as well as for a more realistic example of $t_{2g}$ bands in V$_2$O$_3$. An analogy with the search of the ground state of a many-electron system is also discussed.Comment: 13 pages, 6 figure

Testing of powders for sensitivity to air effect segregation

A loss of blend homogeneity through handling operations can have a major influence on the mechanical properties of sintered products. Plant optimisation to minimise the potential for segregation of blends can be undertaken through an audit of handling operations combined with an evaluation of the materials that are handled through the process. The correct identification of the mechanism of segregation is essential to support strategies to implement the most efficient and cost-effective counter measures. In support of this type of industrial activity, a piece of test apparatus has recently been developed to provide measurements of segregation potential for powders (metal and mineral) that are prone to loss of homogeneity (by composition or particle size) when subjected to counter-directional air displacements through equipment. The test equipment is described and examples given of its output in industrial application