Mathias Kifmann

Community rating in health insurance and different benefit packages

This paper presents a model of a competitive health insurance market with two risk types and two health benefits. In the benchmark case, community rating insurers (CRIs) are only allowed to offer the basic benefit. The additional benefit is sold by risk rating insurers (RRIs). It is shown that low risk types can only be better off at the expense of high risk types if CRIs are allowed to offer the additional benefit and no additional measures are taken. However, high risk types can be made better off if CRIs must offer the additional benefit or if community rating health insurers offering the additional benefit are subsidized while those selling only the basic benefit are taxed.

A duration analysis of the effects of tuition fees for long term students in Germany

Summary We examine the impact of tuition fees for long-term students at the University of Konstanz. Applying duration analysis to examine how tuition fees influence when and how students finish their studies in six different majors, we find significant effects with respect to the hazard rates of the various ways of terminating one’s studies. Furthermore, we analyze how the probability of terminating one’s studies in a certain period of time changes. Students obtain a degree in a shorter period of time in two majors. In three other majors, however, we observe that the probability of obtaining a degree generally decreased.

Premium subsidies and social health insurance: Substitutes or complements? ☆

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 health insurance from a welfare perspective. We show that the results crucially depend on the correlation of health and productivity. For a positive correlation, we find that combining premium subsidies with social health insurance is the optimal policy.

Age-Dependent Taxation and the Optimal Retirement Benefit Formula

Abstract This paper presents a comprehensive view of lifetime taxation including both explicit taxation through the general tax system and implicit taxation via the retirement benefit formula. Differences in productivity between individuals are unobservable, which provides a rationale for the use of distortionary taxes. It is shown that the optimal structure of age-dependent taxation can be characterized by a generalized Ramsey formula. Furthermore, the paper derives the optimal retirement benefit formula in the presence of the general tax system and examines the compatibility with the financial stability of the pension system.

Risk Selection and Complementary Health Insurance: The Swiss Approach

To avoid risk selection, the market for complementary health insurance is usually completely separate from the market for basic health insurance. In Switzerland, however, the basic benefit package and complementary insurance are offered by the same insurer. Risk-based premiums are allowed with respect to complementary insurance. This paper compares the Swiss integration approach to the separation approach. It is shown that under the integration approach insurers cream-skim by selling complementary insurance to low risks at a discount. Nevertheless, the integration approach can be Pareto-superior if the cost savings due to the integration of basic and complementary insurance are sufficiently large.

The German Retirement Benefit Formula : Drawbacks and Alternatives

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 effects arise if the earnings ceiling is raised or mandatory membership is extended, or if life expectancy rises or the rate of population growth declines. We present three alternative formulas. In particular, a return-rate formula that rewards contributions with the internal rate of return of the pay-as-yougo pension system is superior to the current formula. This formula corresponds to the concept of notional defined contribution pensions that has been recently introduced in several countries.

Premium Risk and Managed Care

This paper analyzes how individuals can insure premium risk and obtain high quality health insurance in a managed care environment. Insurers choose health care providers. Only a fraction of high risk individuals is unambiguously identifiable in front of a court. Premium insurance is not able to reach a first-best risk allocation while health insurers have an incentive to stint on quality under guaranteed renewable contracts. It is shown that a contract exists which can implement the first-best. This contract specifies payments to individuals and a third party upon switching to create a credible self-commitment by the insurer to provide high quality.

Community rating and choice between traditional health insurance and managed care

This paper analyses the consequences of allowing a choice between traditional insurance and managed care under community rating. A model of a competitive health insurance market is developed; with the risk equalization scheme being imperfect. There are two types of individuals who are characterized by different costs with respect to traditional insurance. Compared with a situation where traditional insurance is compulsory, allowing choice can make both types better off, can increase the utility of low-cost types at the expense of high-cost types, as well as having no effect. Inefficiencies under compulsory traditional insurance can be eliminated and new inefficiencies can be created. Market equilibria are not necessarily second best.

Competition policy for health care provision in Germany

Since the 1990s, Germany has introduced a number of competitive elements into its public health care system. Sickness funds were given some freedom to sign selective contracts with providers. Competition between ambulatory care providers and hospitals was introduced for certain diseases and services. As competition has become more intense, the importance of competition law has increased. This paper reviews these areas of competition policy. The problems of introducing competition into a corporatist system are discussed. Based on the scientific evidence on the effects of competition, key lessons and implications for future policy are formulated.

Indikationsspezifische Kosten-Nutzen-Bewertung auf Grundlage eines sozialen Gesundheitsindexes

This paper proposes a method for cost-benefit evaluation in a given therapeutic area. The key concept is a social health index which measures the performance of the health system. It considers both the level and the distribution of health in the population. If improvements in the social health index are valued according to a social willingness to pay, it is possible to determine the optimal therapy for each therapeutic area. A maximum price can be assigned to medications which are more effective. This price will be higher, the lower the present health level in a therapeutic area.