Dataset Information

Private Information and Insurance Rejections.

ABSTRACT: Across a wide set of non-group insurance markets, applicants are rejected based on observable, often high-risk, characteristics. This paper argues that private information, held by the potential applicant pool, explains rejections. I formulate this argument by developing and testing a model in which agents may have private information about their risk. I first derive a new no-trade result that theoretically explains how private information could cause rejections. I then develop a new empirical methodology to test whether this no-trade condition can explain rejections. The methodology uses subjective probability elicitations as noisy measures of agents beliefs. I apply this approach to three non-group markets: long-term care, disability, and life insurance. Consistent with the predictions of the theory, in all three settings I find significant amounts of private information held by those who would be rejected; I find generally more private information for those who would be rejected relative to those who can purchase insurance; and I show it is enough private information to explain a complete absence of trade for those who would be rejected. The results suggest private information prevents the existence of large segments of these three major insurance markets.

SUBMITTER: Hendren N

PROVIDER: S-EPMC3812958 | biostudies-literature | 2013 Sep

REPOSITORIES: biostudies-literature

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Private Information and Insurance Rejections.

Hendren Nathaniel N

Econometrica : journal of the Econometric Society 20130901 5

Across a wide set of non-group insurance markets, applicants are rejected based on observable, often high-risk, characteristics. This paper argues that private information, held by the potential applicant pool, explains rejections. I formulate this argument by developing and testing a model in which agents may have private information about their risk. I first derive a new no-trade result that theoretically explains how private information could cause rejections. I then develop a new empirical m ...[more]

PMID: 24187381

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Project description:BackgroundAfter achieving universal basic medical insurance coverage, Chinese government put the development of private health insurance (PHI) on its agenda to further strengthen financial risk protection. This paper aims to assess the level of financial protection that PHI provides for its insured households on the basis of resident basic medical insurance (RBMI).MethodsWe employed balanced panel data collected between 2015 and 2017 from the China Household Finance Survey (CHFS). Catastrophic health expenditure (CHE) and impoverishment due to health spending were applied to measure the financial protection effects. Random effects panel logistic regression model was performed to identify the factors associated with CHE and impoverishment among households covered by RBMI. In the robustness test, the method of propensity score matching (PSM) was employed to solve the problem of endogeneity.ResultsFrom 2015 to 2017, the CHE incidence increased from 12.96 to 14.68 % for all sampled households, while the impoverishment rate decreased slightly from 5.43 to 5.32 % for all sampled households. In 2015, the CHE incidence and impoverishment rate under RBMI + PHI were 4.53 and 0.72 %, respectively, which were lower than those under RBMI alone. A similar phenomenon was observed in 2017. Regression analysis also showed that the households with RBMI + PHI were significantly less likely to experience CHE (marginal effect: -0.054, 95 %CI: -0.075 to -0.034) and impoverishment (marginal effect: -0.049, 95 %CI: -0.069 to -0.028) compared to those with RBMI alone. The results were still robust after using PSM method to eliminate the effects of self-selection on the estimation results.ConclusionsIn the context of universal basic medical insurance coverage, the CHE incidence and impoverishment rate of Chinese households with RBMI were still considerably high in 2015 and 2017. PHI played a positive role in decreasing household financial risk on the basis of RBMI.

Project description:Background and aimsThe United States of America and Sweden both contain a public and private component to their healthcare systems. While both countries spend a similar amount per capita on public healthcare expenditures, the United States spends significantly more in the private healthcare sector. Sweden has a social democratic model of health care, and given its identity as a welfare state, private health insurance providers have a small and nuanced role.MethodsThis paper was completed after searches were queried for "Sweden," "United States," and variants of the words "insurance," "public," "private," "Medicare," "Medicaid," "public," and "costs." A preliminary search in May 2022, yielded 78 articles, of which 45 were ultimately considered relevant for this review. Inclusion criteria consisted of English language articles, topic relevance, and verification of MEDLINE-indexed journals. These searches were performed in PubMed, Google Scholar, Embase, and Cochrane. Summary findings of these searches are compiled in this review.ResultsSweden guarantees low-cost appropriate care to all citizens with equitable access; however, drawbacks of its system include high financial burden, lack of primary care infrastructure, as well as geographical and socioeconomic inequities. On the other hand, the United States' healthcare system is built around the private sector with public health insurance reserved only for the most vulnerable patient populations.ConclusionOur goal is to provide an overview, compare the role of private health insurance in both countries, and highlight policies that have had beneficial effects in each nation. Possible solutions to the drawbacks of each nation's health insurance policies could be addressed by additional support to Sweden's vulnerable population by developing a program similar to the US' Medicare Advantage program. Conversely, the United States may benefit from increasing access to public health insurance, especially in instances where families face unemployment.

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Private Information and Insurance Rejections.

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Private Information and Insurance Rejections.

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