Moral Hazard in Health Insurance: How Important Is Forward Looking Behavior?

We investigate whether individuals exhibit forward looking behavior in their response to the non-linear pricing common in health insurance contracts. Our empirical strategy exploits the fact that employees who join an employer-provided health insurance plan later in the calendar year face the same initial ("spot") price of medical care but a higher expected end-of-year ("future") price than employees who join the same plan earlier in the year. Our results reject the null of completely myopic behavior; medical utilization appears to respond to the future price, with a statistically significant elasticity of medical utilization with respect to the future price of -0.4 to -0.6. To try to quantify the extent of forward looking behavior, we develop a stylized dynamic model of individual behavior and calibrate it using our estimated behavioral response and additional data from the RAND Health Insurance Experiment. Our calibration suggests that the elasticity estimate may be substantially smaller than the one implied by fully forward-looking behavior, yet it is sufficiently high to have an economically significant effect on the response of annual medical utilization to a non-linear health insurance contract. Overall, our results point to the empirical importance of accounting for dynamic incentives in analyses of the impact of health insurance on medical utilization.

ESTIMATING WELFARE IN INSURANCE MARKETS USING VARIATION IN PRICES

We provide a graphical illustration of how standard consumer and producer theory can be used to quantify the welfare loss associated with inefficient pricing in insurance markets with selection. We then show how this welfare loss can be estimated empirically using identifying variation in the price of insurance. Such variation, together with quantity data, allows us to estimate the demand for insurance. The same variation, together with cost data, allows us to estimate how insurer s costs vary as market participants endogenously respond to price. The slope of this estimated cost curve provides a direct test for both the existence and nature of selection, and the combination of demand and cost curves can be used to estimate welfare. We illustrate our approach by applying it to data on employer-provided health insurance from one specific company. We detect adverse selection but estimate that the quantitative welfare implications associated with inefficient pricing in our particular application are small, in both absolute and relative terms.National Institute of Aging (R01 AG032449

Estimating Welfare in Insurance Markets Using Variation in Prices

We show how standard consumer and producer theory can be used to estimate welfare in insurance markets with selection. The key observation is that the same price variation needed to identify the demand curve also identifies how costs vary as market participants endogenously respond to price. With estimates of both the demand and cost curves, welfare analysis is straightforward. We illustrate our approach by applying it to the employee health insurance choices at Alcoa, Inc. We detect adverse selection in this setting but estimate that its quantitative welfare implications are small, and not obviously remediable by standard public policy tools.

Selection on moral hazard in health insurance

We use employee-level panel data from a single rm to explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral ( moral hazard ) response to insurance, a phenomenon we label selection on moral hazard. Using a model of plan choice and medical utilization, we present evidence of heterogeneous moral hazard as well as selection on it, and explore some of its implica- tions. For example, we show that, at least in our context, abstracting from selection on moral hazard could lead to over-estimates of the spending reduction associated with introducing a high-deductible health insurance option.National Institute on Aging (NIA (R01 AG032449))National Cancer Institute (U.S.) (Grant SES-0643037)United States. Social Security Administration (grant #5 RRC08098400-03-00)Aluminum Company of AmericaAlfred P. Sloan FoundationJohn D. and Catherine T. MacArthur Foundation (Network on Socioeconomic Status and Health

How general are risk preferences? Choices under uncertainty in different domains.

We examine the extent to which an individual's actual insurance and investment choices display a stable ranking in willingness to bear risk, relative to his peers, across different contexts. We do so by examining the same individuals' decisions regarding their 401(k) asset allocations and their choices in five different employer-provided insurance domains, including health and disability insurance. We reject the null that there is no domain-general component of preferences. Among the five insurance domains, the magnitude of the domain-general component of preferences appears substantial; we find for example that one's choices in other insurance domains are substantially more predictive of one's choice in a given insurance domain than either one's detailed demographic characteristics or one's claims experience in that domain. However, we find considerably less predictive power between one's insurance choices and the riskiness of one's 401(k) asset allocations, suggesting that the common element of an individual's preferences may be stronger among domains that are "closer" in context. We also find that the relationship between insurance and investment choices appears considerably larger for employees who may be associated with better "financial sophistication." Overall, we view our findings as largely consistent with an important domain-general component of risk preferences.

Retracted papers on SARS-CoV-2 and COVID-19

Severe acute respiratory syndrome-relatedcoronavirus-2 (SARS-CoV-2) has become the most importantfield of research in 2020. Scientific journals have been managing an unprecedented number of manuscript submissions comprised of research on this topic. Acceleratedpublication of papers containing data regarding SARS-CoV-2has been facilitated, assuming that rapid circulation of important knowledge may save lives. Experts have raised concerns regarding the methodological quality of articles published after accelerated review processes.1e3Access to preprint versions of scientific papers has also increased. Retraction is a mechanism for alerting readers that an article contains seriously flawed or erroneous content and isunreliable.4The aim of this study was to systematically collect data on articles on SARS-CoV-2 and coronavirus disease 2019 (COVID-19) that have been retracted, temporarily retracted, or that have triggered expressions of concer

Selection on Moral Hazard in Health Insurance

In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on moral hazard" can have important implications for attempts to combat either selection or moral hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous moral hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and moral hazard. For example, one implication of our estimates is that abstracting from selection on moral hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.

RNA–protein binding kinetics in an automated microfluidic reactor

Microfluidic chips can automate biochemical assays on the nanoliter scale, which is of considerable utility for RNA–protein binding reactions that would otherwise require large quantities of proteins. Unfortunately, complex reactions involving multiple reactants cannot be prepared in current microfluidic mixer designs, nor is investigation of long-time scale reactions possible. Here, a microfluidic ‘Riboreactor’ has been designed and constructed to facilitate the study of kinetics of RNA–protein complex formation over long time scales. With computer automation, the reactor can prepare binding reactions from any combination of eight reagents, and is optimized to monitor long reaction times. By integrating a two-photon microscope into the microfluidic platform, 5-nl reactions can be observed for longer than 1000 s with single-molecule sensitivity and negligible photobleaching. Using the Riboreactor, RNA–protein binding reactions with a fragment of the bacterial 30S ribosome were prepared in a fully automated fashion and binding rates were consistent with rates obtained from conventional assays. The microfluidic chip successfully combines automation, low sample consumption, ultra-sensitive fluorescence detection and a high degree of reproducibility. The chip should be able to probe complex reaction networks describing the assembly of large multicomponent RNPs such as the ribosome

Does the majority always know best? Young children's flexible trust in majority opinion

Copying the majority is generally an adaptive social learning strategy but the majority does not always know best. Previous work has demonstrated young children's selective uptake of information from a consensus over a lone dissenter. The current study examined children's flexibility in following the majority: do they overextend their reliance on this heuristic to situations where the dissenting individual has privileged knowledge and should be trusted instead? Four- to six- year-olds (N = 103) heard conflicting claims about the identity of hidden drawings from a majority and a dissenter in two between-subject conditions: in one, the dissenter had privileged knowledge over the majority (he drew the pictures); in the other he did not (they were drawn by an absent third party). Overall, children were less likely to trust the majority in the Privileged Dissenter condition. Moreover, 5- and 6- year-olds made majority-based inferences when the dissenter had no privileged knowledge but systematically endorsed the dissenter when he drew the pictures. The current findings suggest that by 5 years, children are able to make an epistemic-based judgment to decide whether or not to follow the majority rather than automatically following the most common view