Long-term Health Insurance Research Articles

Factors Affecting Recurrent Staphylococcus aureus Bacteremia Among Older Patients in Rural Community Hospitals: A Retrospective Cohort Study.

Introduction Staphylococcus aureus bacteremia (SAB) poses a significant health risk, particularly among adults over 65 years old, due to age-related vulnerabilities and comorbidities. Recurrent SAB is associated with increased morbidity, prolonged hospitalizations, and higher healthcare costs, necessitating the identification of risk factors that contribute to these recurrent infections. Methods A retrospective cohort study was conducted at a rural community hospital to identify factors associated with recurrent SAB in older patients. Data were extracted from electronic medical records of patients diagnosed with SAB between April 2016 and December 2023. Multivariate logistic regression was employed to analyze the relationship between recurrent SAB and potential risk factors, including age, sex, BMI, dependency on Japanese long-term health insurance, and comorbidities. Results Among 99 patients with SAB, 36 (36.4%) experienced recurrence. Higher BMI was significantly associated with recurrent SAB (OR: 1.15, 95% CI: 1.01-1.31, p = 0.036), while dependency on long-term care was associated with a lower risk of recurrence (OR: 0.20, 95% CI: 0.06-0.64, p = 0.007). Age and sex did not show significant associations with recurrence. Conclusion This study identified higher BMI as a risk factor for recurrent SAB in older patients, while dependency on long-term care was protective. These findings highlight the need for targeted management strategies for patients with higher BMI to prevent recurrent SAB. Further research is needed to explore these associations and confirm their relevance in other clinical settings.

Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects

Abstract Reclassification risk is a major concern in health insurance where contracts are typically 1 year in length but health shocks often persist for much longer. While most health systems with private insurers pair short-run contracts with substantial pricing regulations to reduce reclassification risk, long-term contracts with one-sided insurer commitment have significant potential to reduce reclassification risk without the negative side effects of price regulation, such as adverse selection. We theoretically characterize optimal long-term insurance contracts with one-sided commitment, extending the literature in directions necessary for studying health insurance markets. We leverage this characterization to provide a simple algorithm for computing optimal contracts from primitives. We estimate key market fundamentals using data on all under-65 privately insured consumers in Utah. We find that dynamic contracts are very effective at reducing reclassification risk for consumers who arrive at the market in good health, but they are ineffective for consumers who come to the market in bad health, demonstrating that there is a role for the government insurance of pre-market health risks. Individuals with steeply rising income profiles find front-loading costly, and thus relatively prefer ACA-type exchanges. Switching costs enhance, while myopia moderately compromises, the performance of dynamic contracts.

A Suicide-Specific Diagnosis – The Case Against

A Suicide-Specific Diagnosis – The Case Against

Optimization of medical insurance actuarial based on biometric data

Only a detailed study of the insured in long-term health insurance can better avoid risks and further serve the insured. Biostatistics is a discipline that applies the principles and methods of statistics to study life sciences, reveals the inevitable laws in a large number of random phenomena from the quantitative aspect, and is the application of probability theory and mathematical statistics in the biological field. The research results provide new ideas and methods for actuarial science of social health insurance in China.

Chilean Long-Term Health Insurance: Lapsing in Markets with Guaranteed Renewable Contracts

Chilean Long-Term Health Insurance: Lapsing in Markets with Guaranteed Renewable Contracts

Updating Bonus–Malus Indexing Mechanism to Adjust Long-Term Health Insurance Premiums

Economic shocks, high inflation, longevity, and new emerging technologies make the long-term health care insurance challenging for insurers. To overcome this problem, an indexing mechanism has been employed to update predicted premiums based on the new information in hand. Such indexing mechanisms have thus far failed to consider the available policyholder’s risk experience at its updating time. This article employs the well-known bonus–malus system to introduce a bonus–malus indexing mechanism that takes into account the policyholder’s risk experience in its updating mechanism. More precisely, it uses the bonus–malus system’s idea to update the premium of each policyholder based upon her or his risk experience as well as updated inflation. The theoretical foundation of this approach has been developed and its practical implementation is shown through a simulation study.

Long-Term Health Insurance: Theory Meets Evidence

Long-Term Health Insurance: Theory Meets Evidence

Optimal Long-Term Health Insurance Contracts: Characterization, Computation, and Welfare Effects

Reclassification risk is a major concern in health insurance where contracts are typically one year in length but health shocks often persist for much longer. While most health systems with private insurers emphasize short-run contracts paired with substantial pricing regulations to reduce reclassification risk, long-term contracts with one-sided insurer commitment have significant potential to reduce reclassification risk without the negative side effects of price regulation, such as adverse selection. In this paper, we theoretically characterize optimal long-term insurance contracts with one-sided commitment, extending prior models of this form in several key directions that are important for studying health insurance markets. We leverage this characterization to provide a simple algorithm for computing optimal contracts from primitives. We estimate key market fundamentals using data on all under-65 privately insured consumers in Utah and pair these estimates with our model to study comparative statics related to contract design and welfare. We find that the welfare value of a system that effectively implements these long-term contracts depends crucially on (i) the degree of public insurance pre-system health risk (ii) the distribution of expected lifetime income gradients in the population (iii) the stochastic process governing life-cycle health shocks (iv) the extent of consumer switching costs and (v) the degree of consumer myopia.

Long-Term Health Insurance: Theory Meets Evidence

To insure policyholders against contemporaneous health expenditure shocks and future reclassi-fication 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 large 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) achieves substantial wel-fare gains compared to a series of risk-rated short-term contracts. Although, by its simple design, the premium setting of GLTHI contract departs significantly from the optimal dynamic contract, surprisingly we only find modest welfare differences between the two. Finally, we conduct coun-terfactual policy experiments to illustrate the welfare consequences of integrating GLTHI into a system with a “Medicare-like” public insurance that covers people above 65.

Lock-in in Dynamic Health Insurance Contracts: Evidence from Chile

Long-term health insurance contracts have the potential to efficiently insure against reclassification risk, but at the expense of other limitations like provider lock-in. This paper empirically investigates the workings of long-term contracts which are subject to this trade-off. Individuals are shielded against premium increases and coverage denial as long as they stay with their initial contract, but those that become higher risk are subject to premium increases or coverage denials upon switching, potentially leaving them locked-in with their original network of providers. I provide the first empirical evidence on the importance of this phenomenon using administrative panel data from the universe of the private health insurance market in Chile, where competing insurers offer long term contracts. I fit a structural model to yearly plan choices, and am able to jointly estimate evolving preferences for different insurance companies and supply-side underwriting in the form of premium risk-rating and coverage denial. To quantify the welfare effects of lock-in, I compare simulated choices under the current rules to those in a counterfactual scenario with no underwriting. The results show that consumers would be willing to pay around 13 percent more in yearly premiums to avoid lock-in. Finally, I study a counterfactual scenario where long-term contracts are replaced with community-rated spot contracts, and I find only minor general-equilibrium effects on premiums and on the allocation of individuals across insurers. I argue that these small effects are the result of large levels of preference heterogeneity uncorrelated to risk.

The Welfare Effects of Long-Term Health Insurance Contracts

Reclassification risk is a major concern in health insurance where contracts are typically one year in length but health shocks often persist for much longer. We use rich individual-level medical information from the Utah all-payer claims database to empirically study one possible solution: long-term insurance contracts. We characterize optimal long-term contracts with one-sided commitment theoretically, derive the contracts that are optimal for consumers in Utah, and assess the welfare level that a full implementation of these contracts could achieve relative to several key benchmarks. We find that dynamic contracts perform very well for the majority of the population, for example, eliminating over 94% of the welfare loss from reclassification risk for individuals who arrive on the market at age 25 in good health. However, dynamic contracts instead provide very little benefit to the worst pre-age-25 health risks. Their value is also substantially lower for consumers whose income growth with age is relatively high. With pre-age-25 insurance in place, consumers with flat net income prefer dynamic contracts to an ACA-like environment, but consumers with steeper income profiles prefer the ACA-like environment. Overall, we show that there are scenarios in which dynamic contracts can provide substantial welfare benefits, but that complementary policies are crucial for unlocking these benefits.

Competitive long-term health insurance

I study the interplay among competition, contractual commitment, income risk, and saving and borrowing in insuring consumers against both short-term healthcare expenses and longer-term changes in health status. Examining different combinations of firms’ ability to commit to long-term contracts, consumers’ access to credit markets, and the availability of termination fees helps to highlight sources of inefficiency.

Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans

We study theoretically and empirically how consumers in an individual private long-term health insurance market with front-loaded contracts respond to newly mandated portability requirements of their old-age provisions. To foster competition, effective 2009, German legislature made the portability of standardized old-age provisions mandatory. Our theoretical model predicts that the portability reform will increase internal plan switching. However, under plausible assumptions, it will not increase external insurer switching. Moreover, the portability reform will enable unhealthier enrollees to reoptimize their plans. We find confirmatory evidence for the theoretical predictions using claims panel data from a big private insurer.

Actuarial Implications from Pre-kindergarten Education

Great progress has been made in providing pre-kindergarten (pre-K) public education throughout the United States. The percentages of 3- and 4-year-olds enrolled nationally have grown from 3% to 5% and 14% to 29%, respectively, between 2002 and 2015. By 2015, 42 states and the District of Columbia were in varying stages of offering pre-K programs (0.9% to 74.2% for totals of 3- and 4-year-olds); eight states were in stages of implementation. We will provide approximate answers to four questions. The first two are how does pre-K education affect female and male life expectancies? The other two are how does pre-K education affect expected years of life dependency in health and in lifetime earnings? The methodology used to help answer these questions consisted of using actuarial/demographic tables over the years 1990 to 2040. It will be shown that upper limits to estimated increases in male and female life expectancy that can be attributed to pre-K education are 2.47 and 1.67 years, respectively. Moderate estimates to the decreases in expected years of health dependency for 65-year old males and females that benefit from pre-K education are 1.47 and 4.71 years, respectively. We will document that people with pre-K education will have higher high school graduation rates, lower crime rates, higher employment rates, and higher wages than those without pre-K education; these four improved rates will lead to improved life expectancies and diminished years of health dependency. These results have actuarial implications for life insurance, long-term health insurance, and pension premium calculations.

Hedging Medical Spending Growth: An Adaptive Expectations Approach.

Long-term health insurance provides consumers with protection against persistent, negative health shocks. While the stochastic rise in medical spending growth may make some health risks harder to insure, financial assets could act as a hedge for medical spending growth risk. The purpose of this research was to determine whether such hedges exist. The results of this study were two-fold. First, the asset classes with the strongest statistical evidence as hedges were bonds, not stocks. Second, any strategy to hedge medical spending growth involved shorting assets i.e. betting against the bond or stock market. Health insurers writing long-term contracts should combine the use of hedges in the bond market with of portfolio diversification, and may benefit from health policies to moderate the uncertainty of medical spending growth.

Who is Changing Health Insurance Coverage? Empirical Evidence on Policyholder Dynamics

Long-term health insurance contracts provide policyholders with the option of lapsing coverage or switching to another tariff within the same insurance company. We empirically analyze policyholder behavior regarding contract commitment in a large data set of German private health insurance contracts. We show that short-term as well as long-term premium development, along with premium adjustment frequency, affect lapse and tariff switch rates. Moreover, the sales channel has a strong impact on switching behavior, indicating that policyholder choice is not fully independent of sales representatives. Our results are important for risk assessment and risk management of portfolios of health insurance contracts and provide better understanding of the dynamics of policyholder behavior in health insurance.

Market-consistent valuation of long-term insurance contracts: valuation framework and application to German private health insurance

In this paper we derive a market-consistent value for long-term insurance contracts, with a focus on long-term health insurance contracts as found, e.g., in the German private health insurance industry. To this end, we first set up a health insurance company model and, second, conduct a simulation study to calculate the present value of future profits and the time value of financial options and guarantees from a portfolio of private health insurance policies. Our analysis quantifies the impact of investment results and underwriting surpluses on shareholder profits with respect to profit sharing rules and premium adjustment mechanisms. In contrast to the valuation of life insurance contracts with similar calculation techniques the results indicate that the time value of financial options and guarantees of German private health insurance contracts is substantially smaller in typical parameter settings.

The epidemiological survey of acute traumatic spinal cord injury (ATSCI) of 2002 in Beijing municipality

Epidemiological survey. To study the incidence and epidemiology of acute traumatic spinal cord injury (ATSCI) of 2002 in Beijing municipality. Beijing. After quota sampling, data of all ATSCI patients who were injured in Beijing in 2002 from sample hospitals were collected for detailed investigation. In all, 1079 patients were estimated to have ATSCI in 2002 in Beijing municipality and the annual incidence was 60.6 per million. The incidence increased more than ninefold compared with that of 6.7 per million between 1982 and 1986. The mean age of patients at the time of injury was 41 years. The male/female ratio was 3.1/1. The causes of injury were fall from height (37.5%), traffic accidents (26.9%), struck by object (16.3%) and fall on ground (8.3%), in that order. The mean expenditure of hospitalisation was 27819.3 RMB in 2002. The proportion of cervical, thoracic and lumbar injuries was 4.9, 28.0 and 65.9, respectively in 2002. The mean time of hospitalisation was 18.9 days and only 1.5% of the spinal cord injury (SCI) patients went to rehabilitation hospitals after their discharge. The severity of neurological impairment was not recorded in the majority of hospitals. There was a rapid increase of the annual SCI incidence from 1982 to 2002 during an economic boom. Safety regulations are of primary importance in preventing the injury. Once happened, long-term health insurance is essential for the well-being of the victims. Although some improvement has been made since 2002, much remains to be done in this direction.

Risk-Adjustment in Long-Term Health Insurance Contracts in Germany

In the private health insurance (phi) market in Germany ageing provisions are used to reduce age-related premium increases in long-term contracts. Currently, the provisions are not transferred if the insured person switches to another provider. Thus, there are no incentives for the insured to cancel their old policy because they would have to pay higher premiums for the same services under a new contract due to higher age and the loss of their ageing provisions. There is a long-standing discussion if it is possible to intensify competition on the phi-market in Germany. The main question is whether the transferring of ageing provisions would lead to risk selection or not. We have reconsidered Meyer's model of transferable risk-adjusted ageing provisions. It has been shown that it is indeed possible to prevent risk selection in a competitive phi-market. We will present a number of counter-arguments to the most frequently stated criticism of the model.