Long-Term Health Insurance: Theory Meets Evidence

Wed, Feb 20, 2019, 12:15 pm to 1:30 pm

"Long-Term Health Insurance: Theory Meets Evidence" (co-authored with Juan Pablo Atal, Martin Karlsson and Nicolas R. Ziebarth) 

ABSTRACT: To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community rated short-term contracts with an individual mandate. Relying on unique claims panel data from a big private insurer in Germany, we study a real-world long-term health insurance application with a life-cycle perspective. We show that German long-term health insurance(GLTHI) provides large welfare gains compared to a series of risk-rated short-term contracts. Although, by design, the GLTHI contract differs substantially from the optimal dynamic contract, we only find modest welfare differences between the two. Moreover, we show that a simple modification to the GLTHI contract would further close this welfare gap. Finally, we conduct counterfactual policy experiments to illustrate the welfare consequences of integrating GLTHI into a system with a “Medicare-like” public insurance that covers  people above 65.

Location: 
399 Julis Romo Rabinowitz Building
Sponsor(s): 
Center for Health and Wellbeing
Research Program in Development Studies
Audience: 
Students, Faculty & Fellows only
Speaker(s): 

Global Health Program Information Session

Tue, Feb 26, 2019, 12:30 pm to 1:15 pm
Location: Julis Romo Rabinowitz Building, Room A71

Oded Galor, Brown University

Tue, Mar 26, 2019, 12:45 pm to 2:00 pm
Location: 217 Julis Romo Rabinowitz Building

Maya Rossin-Slater, Stanford University School of Medicine

Wed, Mar 27, 2019, 12:15 pm to 1:30 pm
Location: 399 Julis Romo Rabinowitz Building

Benjamin Olken, Massachusetts Institute of Technology

Wed, Apr 10, 2019, 12:15 pm to 1:30 pm
Location: 399 Julis Romo Rabinowitz Building

Uwe Reinhardt Memorial Health Economics Conference

Thu, Apr 11, 2019 (All day) to Fri, Apr 12, 2019 (All day)

Timothy Besley, The London School of Economics and Political Science

Tue, Apr 16, 2019, 12:45 pm to 2:00 pm
Location: 217 Julis Romo Rabinowitz Building

Melissa Dell, Harvard University

Mon, Apr 22, 2019, 4:30 pm to 6:00 pm
Location: 127 Corwin Hall

Matthew Notowidigdo, Northwestern University

Wed, May 1, 2019, 12:15 pm to 1:30 pm
Location: 399 Julis Romo Rabinowitz Building