Browsing by Subject "Insurance"

Now showing 1 - 5 of 5
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    Essays on Competition in Health Insurance
    (2021-06) Ryan, Conor
    This dissertation consists of three chapters. In the first chapter, with coauthors Roger Feldman and Stephen Parente, I use a novel data set from a private online marketplace to estimate the demand for individual health insurance among a set comprising many high-income consumers across 18 states. We find that consumers earning more than 4 times the federal poverty level are willing to pay $30 to $135 per month to increase the actuarial value of their insurance by 10 percentage points, much less than low-income consumers. In the second chapter, I show that regulations to address adverse selection and competition policy should be considered complements. To see the relationship, consider the incentive for a firm to offer a product that appeals to low-risk consumers and leads high-risk consumers to purchase insurance elsewhere. This incentive problem, which leads to inefficient consumer sorting, is worst in highly competitive markets and absent in a monopoly. I estimate a model of the individual insurance market by combining the data from chapter one with a risk prediction model to relate preferences to marginal cost. I find that the largest welfare cost in the non-group market comes from high markups. Distortions coming from extensive margin selection and inefficient sorting are significantly addressed by current policies targeting adverse selection which are successful in improving total welfare. However, in the most concentrated markets, insurance firms recapture most of the added surplus through higher markups. In the final chapter, I study the effect of competition on medical consumption through the cost-sharing terms---e.g. copays and coinsurance rates--- of the insurance products. These terms determine the out-of-pocket price of medical care, which affect a patient's medical decisions and thus the patient's health outcomes. Using medical claims data linked to insurance products, I estimate a model of imperfect competition that incorporates adverse selection, moral hazard, and selection on moral hazard. First, I show that, on average, less competition leads to higher levels of cost-sharing but multi-product firms respond by increasing the cost-sharing levels of some products and decreasing others. Second, I find that medical consumption and health respond to cost-sharing terms. A $10 increase in the primary care copay leads to a 5.4% decrease in medical consumption and a 0.1 percentage point increase in inpatient mortality. Putting these results together, I find that a reduction in competition via a merger leads to up to a 4% increase in the primary care copay, an average reduction in medical spending of $17 per person, and an additional six inpatient deaths per year. At estimates of the statistical value of a life, the reduction in spending is more than outweighed by the cost of additional deaths.
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    Managing risk, managing race: racialized actuarial science in the United States, 1881-1948
    (2013-05) Wiggins, Benjamin Alan
    This dissertation investigates how insurers and the United States government relied on the supposed neutrality of actuarial science to justify their racially discriminatory policies. It argues that the use of race as a variable in the statistical assessment of risk transformed the nature of racism and, in turn, ushered racial disparities in health, wealth, and incarceration from the nineteenth century into the twentieth. Specifically, it investigates the explicit use of race in the actuarial formulas of insurers such as Prudential, in prison management and parole-hearing risk assessments, and in the underwriting manual used for the mortgage insurance decisions of the Federal Housing Administration. It finds that already by the dawn of the twentieth century, leading actuaries and statisticians knew that the social and environmental conditions concomitant with slavery, genocide, and indentured servitude distributed risk inequitably among races. However, capital was ambivalent about the wrongs of the past and the state viewed itself as responsible more for the welfare of capital than for the welfare of its citizens of color when it entered the insurance game during the New Deal.
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    Minutes: Senate Committee on Finance and Planning: Subcommittee on Twin Cities Facilites and Support Services: December 20, 2006
    (University of Minnesota, 2006-12-20) University of Minnesota: Subcommittee on Twin Cities Facilities and Support Services
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    Police Misconduct, Monetary Sanctions, and Insurance Models in the Modern Police Accountability Era
    (2024-05) Wulff, Stephen
    Despite many police accountability efforts underway in the contemporary United States, financial immunization of officers continues to enable police impunity. Legal scholars have examined these issues from the vantage points of law and how governments pay for misconduct (Schwartz 2014, 2016); they have also mapped the police liability insurance terrain (Rappaport 2016, 2017). Yet little is known about how police accountability activists and municipal actors—e.g., public officials, police leaders, risk managers—approach and perceive the overlapping issues of insurance, risk management, police accountability, and police misconduct settlements. Furthermore, despite pioneering research in this area by legal scholars, few in-depth municipal case studies currently exist, especially from a sociological and sociolegal perspective. My qualitative case study of municipalities in Minnesota operating with and without market-based insurance elucidates how activists and key municipal representatives approach and perceive these issues and examines a potential insurance alternative. My dissertation grapples with a fundamental paradox: policing as an institution is charged with social control of the general public; however, police violence reflects a breakdown in the social control of what sociologist Howard Becker (1963) refers to as “rule enforcers.” To understand contemporary efforts to stem police violence, my project examines the role that insurance and risk management strategies play—or could potentially play—in regulating police departments and individual officers. I extend the sociology of punishment literature by reinterpreting Feeley and Simon’s (1992) classic “new penology” paradigm through a social movement lens. They argue that a late-twentieth-century penal shift occurred away from rehabilitation toward managing aggregates of dangerous criminal categories (e.g., violent offenders) using risk management approaches. I extend their thesis by examining how police accountability groups are implicitly inverting the new penology onto police in an effort to manage aggregates of dangerous police categories (e.g., violent officers) using risk management approaches. My study also extends the sociology of punishment literature on “monetary sanctions.” Existing research focuses on all the costs imposed by the criminal legal system on denizens accused and/or convicted of a crime (Harris 2016). Instead of focusing on how cities (like Ferguson, Missouri) budget for revenue generated from monetary sanctions and the micro-level predatory effects these sanctions have on traditional offenders, my project illuminates: 1) how police misconduct payouts contribute to tax revenue shortfalls, which can trap cities in long-term debt cycles; and 2) how financially immunizing officers and departments has meso-level predatory effects on cities by diverting tax revenue from the public sector to cover payouts. Since the 2014 killing by police of unarmed African American Michael Brown in Ferguson, policing has faced a public legitimacy crisis. To address core issues raised by Black Lives Matter and other racial justice movements in response to such killings—namely, racial injustice and police impunity—public debate has centered on adopting existing accountability mechanisms and reforms (e.g., body cameras, police de-militarization) (Weitzer 2015). Following the 2020 murder by police of George Floyd in Minneapolis, some activists and community members have also called for defunding and/or abolishing police (Coleman 2020). Meanwhile, policing scholars have identified new accountability mechanisms (e.g., critical incident reporting) to address the weaknesses of past policing reforms (Walker and Archbold 2019). However, insurance as an accountability mechanism has received scant attention in both scholarly and national debates. My study seeks to add to the existing sociological and related interdisciplinary literatures, while shedding light on the salience of this accountability mechanism, by: 1) Elucidating key stakeholders’ approaches to and perceptions of existing and potential insurance models and risk management strategies for regulating police behavior. 2) Uncovering and/or further elucidating municipal, non-profit, and/or private sector insurance and risk management practices that either perpetuate or reduce police impunity and police violence. 3) Informing scholarly and policy discussions on reforming police via insurance. 4) Examining the implications of a potential insurance alternative.
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    Three Essays in Agricultural Economics
    (2022-07) Boyd Leon, Chris
    The three essays that compose this dissertation are on the topic of risk in agriculture in developing countries, where farmers are completely exposed to these risks. The first two chapters focus on price risk and the third focuses on the risk derived from atypical rainfall levels. In the first essay, I address the impacts of a temporary price support policy (a policy that stabilizes and increases prices), in Peru, on the welfare of farmers it aimed to benefit. I exploit the geographical discontinuity of the policy to casually estimate its impacts using differences-in-differences. I find that although the average potato farmer did not significantly change their total consumption due to the policy, the groups of net consumers, farmers with larger shares of potato on total farm sales, and larger farmers increase their consumption due to the price support. Moreover, I find these positive impacts vanish or become negative one year after the policy implementation, suggesting that price support policies are only effective in the short run and for farmers with certain characteristics. In the second essay, I study the production behavior of farmers when introducing a price insurance, i.e., an insurance that stabilizes prices and increases low prices. To assess the causal and pure impact of price risk and price insurance on production behavior, I run an artefactual lab-in-the-field experiment with farmers in Peru. In the experiment, farmers played three games in random order: a baseline game where only price risk exists and it is introduced randomly; a second game where both price risk and an actuarially fair mandatory price insurance exist; and a third game where price risk and the price insurance exist, but the insurance is voluntary and random discounts (of 0%, 50%, or 100%) on the premium are offered. My results suggest that, on average, (i) price risk does not significantly change production relative to price certainty and (ii) neither does the provision of compulsory insurance against price risk, but (iii) the introduction of voluntary insurance causes the average producer on the market to produce more in situations of price risk than in situations of price certainty. Additionally, I find that even in the absence of premium discounts, the insurance against price risk would have a large (i.e., 70-percent) take-up rate. In the third essay, I study how rainfall shocks (i.e., rainfall deviations from the mean) affect rural labor and child health, and I assess the role of mothers’ time use on child nutrition, among rural families in Uganda. My results show that less rainfall in the last month decreases mothers’ timeshare in housework, increases her share in other household-related activities (e.g., fetching water), and does not change her timeshare at the household farm. Less rainfall in the last month also decreases child nutrition. Nonetheless, using mediation analysis, I find that none of the mother’s time-use variables appears to be a mediating factor between rainfall variability and child nutrition. These results suggest that mothers adjust their time-use due to rainfall variability with the objective of preserving their children’s nutrition levels.