We identify several objectionable features of the German retirement benefit formula. Groups of insureds with higher than average life expectancy are subsidized by the rest of the members because the formula neglects differences in group-specific life expectancy. Moreover, undesirable long-run...

Das Bundesministerium für Gesundheit hat Ende März Eckpunkte zur Reform des Risikostrukturausgleichs in der Gesetzlichen Krankenversicherung vorgelegt. Welchen Anforderungen sollte eine solche Reform genügen?

In the absence of a perfect risk adjustment scheme, reimbursing health insurers' costs can reduce risk selection in community-rated health insurance markets. In this paper, we develop a model in which insurers determine the cost efficiency of health care and have incentives for risk selection....

Premium subsidies have been advocated as an alternative to social health insurance. These subsidies are paid if expenditure on health insurance exceeds a given share of income. In this paper, we examine whether this approach is superior to social insurance from a welfare perspective. We show...

We show that quasi-hyperbolic discounting not only affects savings decisions but also the demand for insurance. In general, insurance demand by quasi-hyperbolic discounters is time-inconsistent. Without liquidity constraints they buy more insurance than initially planned. In the presence of...

We study the effects of 'balance billing', i.e., allowing physicians to charge a fee from patients in addition to the fee paid by Medicare. First, we show that on pure efficiency grounds the optimal Medicare fee under balance billing is zero. An active Medicare policy thus can only be justified...

In 2009 the German central health fund was implemented. It was the result of a political compromise. One political party intended to equalise the risk structure among 130 different health care funds, and the other wanted to intensify competition and to improve efficiency among the different...

This study investigates hospitals’ dynamic incentives to select patients when hospitals are remunerated according to a prospective payment system of the DRG type. Given that prices typically reflect past average costs, we use a discrete-time dynamic framework. Patients differ in severity...