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Health insurance is potentially subject to risk selection, i.e. adverse selection on the part of consumers and cream skimming on the part of insurers. Adverse selection models predict that competitive health insurers can eschew high-risk individuals by offering contracts with low deductibles or...
Persistent link: https://www.econbiz.de/10010315523
In the backdrop of the low level of health insurance coverage in India, this study examines the determinants of the scaling-up process of health insurance by analyzing the rational behaviour of an insurance agent facing a trade-off between selling 'health insurance' and 'other forms of...
Persistent link: https://www.econbiz.de/10011807639
When premiums are community-rated, risk adjustment (RA) serves to mitigate competitive insurers'; incentive to select favorable risks. However, unless fully prospective, it also undermines their incentives for efficiency. By capping its volume, one may try to counteract this tendency, exposing...
Persistent link: https://www.econbiz.de/10010315530
This paper sheds light on some unexpected consequences of health insurance regulation that may pose a big challenge to insurers' risk management. Because mandated uniform contributions to health insurance trigger risk selection efforts risk adjustment (RA) schemes become necessary. A good deal...
Persistent link: https://www.econbiz.de/10010315557
In this paper we analyse several measures which are typically included in a social security reform: a cut in the social security benefits, an increase in the social security tax and tax incentives for the purchase of private life annuities, which have recently become quite popular at the...
Persistent link: https://www.econbiz.de/10010294515
This paper investigates the effect of adverse selection on the private annuity market in a model with two periods of retirement. In order to introduce the existence of limited-time pension insurance, we assume that for each period of retirement separate contracts can be purchased. Demand for the...
Persistent link: https://www.econbiz.de/10010294532
This paper investigates the effect of adverse selection and price competition on the private annuity market in a model with two retirement periods. In this framework annuity companies can offer contracts with different payoffs over the periods of retirement. Varying the time structure of the...
Persistent link: https://www.econbiz.de/10010294584
The market for private life annuities is characterised by adverse selection, that is, contracts offer lower than fair payoffs to individuals with low life expectancy. Moreover, life expectancy and income have been found to be positively correlated. The paper shows that a linear tax on annuity...
Persistent link: https://www.econbiz.de/10010294600
This paper includes couples on the demand side and analyses their implications on the problem of adverse selection in the annuity market. First, we examine the pooling equilibrium for individual-life annuities and show that in the presence of couples the rate of return on individuallife...
Persistent link: https://www.econbiz.de/10010294618
We examine equilibria in competitive insurance markets with adverse selection when wealth differences arise endogenously from unobservable savings or labor supply decisions. The endogeneity of wealth implies that high risk individuals may ceteris paribus exhibit the lower marginal willingness to...
Persistent link: https://www.econbiz.de/10010315511