Tag: "insurance"

How Community Rating Hurts Those it is Designed to Help

This illustration comes from Avik Roy:

In the first bar, there is a classically underwritten distribution of insurance costs: the 18-year-old pays $800 in premiums, and the 64-year-old pays $4,800: six times as much. Then, in the second bar, 3-to-1 community rating is imposed, which redistributes the cost of premiums. Now, 18-year-olds must pay $1,400 for insurance—a 75 percent increase—so that 64-year-olds can pay 13 percent less… after adverse selection, the oldest policyholder ends up paying more than he would have under free-market underwriting: $4,900 instead of $4,800. A government policy aimed at forcing young people to subsidize premiums for the elderly ends up driving up costs for everybody.

May 23, 2012 | 5 comments | by

Buying Health Insurance across State Lines

Last year, Georgia became the first state to allow insurers licensed in other states (and subject to other states’ mandates and regulations) to sell insurance in Georgia. But so far, no insurer has even applied. Why is that?

In an exchange between Richard Unger and Michael Cannon, Unger comes across as a general naysayer (offering no explanations of his own) but Cannon’s excuses seem weak: it’s administratively expensive for out-of-state insurance companies to enter the Georgia market, negotiate contracts, create new networks, etc. Here’s the problem: You don’t need out-of-state insurers to do this. In-state insurers (with contract and networks already in place) could in principle start selling insurance under some other state’s laws. Cannon also says that the uncertainty created by the Supreme Court ruling on ObamaCare and the general uncertainty about the implementation of ObamaCare are the culprits – an argument also endorsed by Avik Roy.

Okay, but how hard could it be to file and start selling a new type of insurance for companies already in the trade? After all, they’ve got to sell something.

I’m not convinced we have the right explanation here.

May 21, 2012 | 11 comments | by

Employers as Insurance Companies

We find evidence that women more dependent on their own job for health insurance reduce their labor supply by less after a diagnosis of breast cancer – the estimate difference is about 5.5 to 7 percent. Women’s subjective responses to questions about working more to maintain health insurance are consistent with the conclusions from observed behavior.

 NBER Study byCathy J. Bradley, David Neumark, and Scott Barkowski.

May 21, 2012 | 4 comments | by

Mass: Insurance Doesn’t Lead to More Care

As did the Affordable Care Act, the Massachusetts reform incorporated substance abuse services into the essential benefits to be provided all residents. Prior to the law’s enactment, the state estimated that a half-million residents needed substance abuse treatment. Our mixed-methods exploratory study thus asked whether expanded coverage in Massachusetts led to increased addiction treatment, as indicated by admissions, services, or revenues. In fact, we observed relatively stable use of treatment services two years before and two years after the state enacted its universal health care law.

Full Health Affairs study on why expanded coverage alone will not increase treatment use.

May 17, 2012 | 7 comments | by

Headlines I Wish I Hadn’t Seen

Eduardo Saverin, the billionaire co-founder of Facebook, renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion. List of others who have chosen to expatriate.

While only one in 20 workers in the 1950s required licensing, that figure has since risen to one in three.

Health-insurance companies must tell customers who get a premium rebate this summer that the check is the result of the Obama administration’s health-care law.

Is the administration lobbying the Supreme Court?

Patients that are discharged during the busiest times for hospitals are 50 percent more likely to come back in within three days.

May 15, 2012 | 6 comments | by

Insurance Matters: Young Adults

We exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions.

Paper from the American Economic Journal. Austin Frakt commentary.

May 10, 2012 | 7 comments | by

Headlines I Wish I Hadn’t Seen

Global budgets are coming to Massachusetts.

The researchers found an astonishing 37 errors for every 100 paper prescriptions, versus around 7 per 100 for those who used e-prescribing software.

Simply put, Obama has become more hostile to medical marijuana patients than any president in U.S. history.

May 08, 2012 | 7 comments | by

The Disability Ponzi Scheme

[D]isability insurance payments, which account for almost $1 out of every $5 spent by Social Security, are growing out of control….

The trustees reported Monday that the government made $128.9 billion in insurance payments to 10.6 million disabled workers and their family members last year, 25 percent more than it received from payroll taxes.

More on disability insurance by Eduardo Porter in the NYT.

May 04, 2012 | 4 comments | by

Outlawing Health Insurance that is Too Cheap?

Such policies guarantee that small employers won’t be responsible for any medical payments over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts said this arrangement undercuts the notion of self-insurance because employers aren’t bearing much of the risk.

To address that, the state wants to ban stop-loss coverage below $95,000 per employee, raising the stakes considerably for an employer.

Full article by Chad Terhune on this new proposed legislation in the LA Times.

May 02, 2012 | 5 comments | by

Employers Can Gain By Dropping Coverage

The House Ways and Means Committee plans to release a report Tuesday that says 71 of the nation’s top companies could save almost $30 billion in 2014 by dropping health insurance coverage for their employees.

The committee surveyed 71 companies in the Fortune 100 and determined they could save more than $28 billion in 2014 alone by dropping insurance coverage and instead paying the $2,000-per-employee penalty. Savings over the following decade could be $422.4 billion.

More on this topic in the Kaiser Health News (gated). HT: Michael Ramlet.

May 01, 2012 | 4 comments | by
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