Incentive-Compatible Guaranteed Renewable Health Insurance

Multi-period theoretical models of renewable insurance display front-loaded premium schedules that both cover lifetime total claims of low-risk and high-risk individuals and provide an incentive for those who remain low-risk to continue to purchase the policy. In practice, however, an age profile of premiums that decreases with age might result in relatively high premiums for younger individuals which they may consider unaffordable. In this paper, we use medical expenditure data to estimate an optimal competitive age-based premium schedule for a benchmark renewable health insurance policy. We find that the amount of prepayment by younger individuals that would be necessary to cover future claims is mitigated by three factors: high-risk individuals will either recover or die, low-risk expected expense increases with age, and the likelihood of developing a high-risk condition increases with age. Although medical cost growth over time increases the amount of prepayment necessary, the resulting optimal premium path generally increases with age. We also find that actual premium paths exhibited by purchasers of individual insurance with guaranteed renewability is close to the optimal schedule we estimate. Finally, we examine consumers' gain in expected utility associated with the guaranteed renewability feature.

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.

Little Red Herrings-File Not Really Found

I f you look at the screen-shot captured here (accessed 19 November 2012) you’ll think that this book, now out-of-print, is one I wrote but that apparently did not do well. You’d only be half right, and therein lies a tortuous tale. This book is not out-of-print because it never saw the light of printed day

Astrodynamics of the Next Generation Space Weather Prediction Mission

Accurate prediction of the solar wind properties, interplanetary magnetic field direction and various space weather phenomena becomes ever more important as our dependence on Earth orbiting spacecraft increases. Different solar wind drivers can lead both to enhancements and losses of relativistic electrons in the outer radiation belts, thus posing a major risk to satellites. To further our understanding of the Sun’s impact on the near Earth space environment, as well as to provide predictive capabilities, a mission placing monitoring satellites in key orbits in the inner Solar System is being proposed. As part of that effort, the possibility of using Libration point orbits for these monitoring satellites is investigated. Using the Circular Restricted Three Body Problem (CRTBP) as an early assessment of transfer trajectories to Libration point orbits around Earth and the other inner planets. Single and multiple shooting methods are implemented and used to find solutions to the equations of motion of the CRTBP targeting periodic orbits and transfer trajectories. Various transfer methods are discussed and Low Energy transfers using invariant manifolds are evaluated. Transfers from Earth to Sun-Earth L1 as well as Sun-Venus, and Sun-Mercury L1 are computed