295 research outputs found
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.
A Conversation with Alan Gelfand
Alan E. Gelfand was born April 17, 1945, in the Bronx, New York. He attended
public grade schools and did his undergraduate work at what was then called
City College of New York (CCNY, now CUNY), excelling at mathematics. He then
surprised and saddened his mother by going all the way across the country to
Stanford to graduate school, where he completed his dissertation in 1969 under
the direction of Professor Herbert Solomon, making him an academic grandson of
Herman Rubin and Harold Hotelling. Alan then accepted a faculty position at the
University of Connecticut (UConn) where he was promoted to tenured associate
professor in 1975 and to full professor in 1980. A few years later he became
interested in decision theory, then empirical Bayes, which eventually led to
the publication of Gelfand and Smith [J. Amer. Statist. Assoc. 85 (1990)
398-409], the paper that introduced the Gibbs sampler to most statisticians and
revolutionized Bayesian computing. In the mid-1990s, Alan's interests turned
strongly to spatial statistics, leading to fundamental contributions in
spatially-varying coefficient models, coregionalization, and spatial boundary
analysis (wombling). He spent 33 years on the faculty at UConn, retiring in
2002 to become the James B. Duke Professor of Statistics and Decision Sciences
at Duke University, serving as chair from 2007-2012. At Duke, he has continued
his work in spatial methodology while increasing his impact in the
environmental sciences. To date, he has published over 260 papers and 6 books;
he has also supervised 36 Ph.D. dissertations and 10 postdocs. This interview
was done just prior to a conference of his family, academic descendants, and
colleagues to celebrate his 70th birthday and his contributions to statistics
which took place on April 19-22, 2015 at Duke University.Comment: Published at http://dx.doi.org/10.1214/15-STS521 in the Statistical
Science (http://www.imstat.org/sts/) by the Institute of Mathematical
Statistics (http://www.imstat.org
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 Risk, Income, and Employment-Based Health Insurance
While many believe that an individual’s health plays an important role in both their willingness and ability to obtain health insurance in the employment-based setting, relatively little agreement exists on the extent to which health status affects coverage rates, particularly for those with lower incomes. In this paper, we examine the relationship between health risk and the purchase of group health insurance and whether that relationship differs by a person’s income and whether they obtain coverage in the small, medium, or large group market. Using the panel component of the 1996-2002 Medical Expenditure Panel Survey (MEPS), we find that health risk is positively associated with private health insurance across the different markets, and that this positive relationship is stronger for low and middle income people, particularly in the large group market. Our results are consistent with the existence of adverse selection in the group market in the form of low rates of coverage among low risks due to an absence of risk rating of premiums. We conclude that pooled premiums for low risks, particularly those with low incomes, may represent a more important financial barrier to coverage in voluntary group insurance than high premiums for high risks.
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.
Tax Credits, the Distribution of Subsidized Health Insurance Premiums, and the Uninsured
This paper investigates the impact of a $1000 refundable tax credit for self-only coverage on net premiums and insurance purchases for a representative sample of potential buyers in the individual insurance market. Two methods are used to estimate the distribution of premiums: predicted premiums based on a sample of actual purchasers, and premium quotations drawn from an e-insurance web site. In most of the simulations, the net premiums for half or more of the prospective buyers are reduced to zero or low levels. The number of uninsured is reduced by between 21 percent and 85 percent depending on the size of the deductible in the benchmark plan. However, the results are sensitive to assumptions about insurer underwriting practices.
First-principle Wannier functions and effective lattice fermion models for narrow-band compounds
We propose a systematic procedure for constructing effective lattice fermion
models for narrow-band compounds on the basis of first-principles electronic
structure calculations. The method is illustrated for the series of
transition-metal (TM) oxides: SrVO, YTiO, VO, and
YMoO. It consists of three parts, starting from LDA. (i)
construction of the kinetic energy Hamiltonian using downfolding method. (ii)
solution of an inverse problem and construction of the Wannier functions (WFs)
for the given kinetic energy Hamiltonian. (iii) calculation of screened Coulomb
interactions in the basis of \textit{auxiliary} WFs, for which the
kinetic-energy term is set to be zero. The last step is necessary in order to
avoid the double counting of the kinetic-energy term, which is included
explicitly into the model. The screened Coulomb interactions are calculated in
a hybrid scheme. First, we evaluate the screening caused by the change of
occupation numbers and the relaxation of the LMTO basis functions, using the
conventional constraint-LDA approach, where all matrix elements of
hybridization involving the TM orbitals are set to be zero. Then, we switch
on the hybridization and evaluate the screening associated with the change of
this hybridization in RPA. The second channel of screening is very important,
and results in a relatively small value of the effective Coulomb interaction
for isolated bands. We discuss details of this screening and consider
its band-filling dependence, frequency dependence, influence of the lattice
distortion, proximity of other bands, and the dimensionality of the model
Hamiltonian.Comment: 35 pages, 25 figure
An efficient employer strategy for dealing with adverse selection in Multiple-Plan Offerings: An MSA Example
Abstract This paper outlines a feasible employee premium contribution policy, which would reduce the inefficiency associated with adverse selection when a limited coverage insurance policy is offered alongside a more generous policy. The ''efficient premium contribution'' is defined and is shown to lead to an efficient allocation across plans of persons who differ by risk, but it may also redistribute against higher risks. A simulation of the additional Ĺ˝ . option of a catastrophic health plan CHP accompanied by a medical savings account Ĺ˝ . MSA is presented. The efficiency gains from adding the MSArcatastrophic health Ĺ˝ . insurance plan CHP option are positive but small, and the adverse consequences for high risks under an efficient employee premium are also small.
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