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Steve Cicala - One of the best experts on this subject based on the ideXlab platform.
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cost of Service Regulation in u s health care minimum medical loss ratios
Social Science Research Network, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005-2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market.
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cost of Service Regulation in u s health care minimum medical loss ratios
National Bureau of Economic Research, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets, thereby capping insurer profit margins, but not levels. While intended to reduce premiums, we show this rule creates incentives analogous to cost of Service Regulation. Using variation created by the rule's introduction as a natural experiment, we find claims costs rose nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market. Premiums were unaffected.
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cost of Service Regulation in u s health care minimum medical loss ratios
Research Papers in Economics, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:In health insurance markets, an insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005–2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold, 7% in the individual market, and 2% in the group market.
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when does Regulation distort costs lessons from fuel procurement in u s electricity generation
The American Economic Review, 2015Co-Authors: Steve CicalaAbstract:Under what conditions does cost-of-Service Regulation lead firms to distort costs? This paper analyzes changes in fuel procurement practices by coal- and natural gas-fired electricity generating plants in the United States following state-level legislation that ended cost-of-Service Regulation among investor-owned electric utilities in the late 1990s. I construct a detailed dataset that links confidential, shipment-level data on the price of virtually all of the fuel delivered to coal- and gas-fired electricity plants in the United States from 1990-2009, with plant-level data on operations and regulatory status. Using a matched difference-in-difference estimation strategy to account for confounding shipping costs, I find the price of coal drops by 12% at deregulated plants relative to matched plants that were not subject to any regulatory change, whereas there was no relative drop in the price of gas. Deregulated plants disproportionately switch to burning low-sulfur coal rather than install capital-intensive abatement equipment to comply with environmental Regulations, and expand imports from out of state by 25% if they were initially burning in-state coal. I show how these results lend support to theories of asymmetric information between generators and regulators, regulatory capture, and capital-bias as important sources of distortion under cost-of-Service Regulation. I then show that the drop in the price of coal is associated with a reallocation of purchases to more productive mines, rather than simply a transfer of regulatory rents from coal producers to electricity generators. Although only one quarter of U.S. coal-fired capacity has been deregulated, the end of cost-of-Service Regulation has reduced the price of fuel by about one billion dollars per year for these plants.
Victoria Marone - One of the best experts on this subject based on the ideXlab platform.
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cost of Service Regulation in u s health care minimum medical loss ratios
National Bureau of Economic Research, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets, thereby capping insurer profit margins, but not levels. While intended to reduce premiums, we show this rule creates incentives analogous to cost of Service Regulation. Using variation created by the rule's introduction as a natural experiment, we find claims costs rose nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market. Premiums were unaffected.
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cost of Service Regulation in u s health care minimum medical loss ratios
Social Science Research Network, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005-2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market.
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cost of Service Regulation in u s health care minimum medical loss ratios
Research Papers in Economics, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:In health insurance markets, an insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005–2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold, 7% in the individual market, and 2% in the group market.
Ethan M J Lieber - One of the best experts on this subject based on the ideXlab platform.
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cost of Service Regulation in u s health care minimum medical loss ratios
National Bureau of Economic Research, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets, thereby capping insurer profit margins, but not levels. While intended to reduce premiums, we show this rule creates incentives analogous to cost of Service Regulation. Using variation created by the rule's introduction as a natural experiment, we find claims costs rose nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market. Premiums were unaffected.
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cost of Service Regulation in u s health care minimum medical loss ratios
Social Science Research Network, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005-2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold: 7% in the individual market, and 2% in the group market.
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cost of Service Regulation in u s health care minimum medical loss ratios
Research Papers in Economics, 2017Co-Authors: Steve Cicala, Ethan M J Lieber, Victoria MaroneAbstract:In health insurance markets, an insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. As part of the goal of reducing the cost of health care coverage, the Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets as of 2011, thereby explicitly capping insurer profit margins, but not levels. This cap was binding for many insurers, with over $1 billion of rebates paid in the first year of implementation. We model this constraint imposed upon a monopolistic insurer, and derive distortions analogous to those created under cost of Service Regulation. We test the implications of the model empirically using administrative data from 2005–2013, with insurers persistently above the minimum MLR threshold serving as the control group in a difference-in-difference design. We find that rather than resulting in reduced premiums, claims costs increased nearly one-for-one with distance below the regulatory threshold, 7% in the individual market, and 2% in the group market.
Rafael Domenech - One of the best experts on this subject based on the ideXlab platform.
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Service Regulations input prices and export volumes evidence from a panel of manufacturing firms
Social Science Research Network, 2017Co-Authors: Monica Correalopez, Rafael DomenechAbstract:Using a panel of firm‐level data from Spanish manufacturers, this study shows that better Service Regulation reduces the price of intermediate inputs paid by downstream firms. The beneficial cost effects of Services reforms extend to both large and small‐to‐medium sized corporations (SME’s), but the former tend to enjoy greater gains. This feature also manifests itself in international markets. We find evidence of an input cost channel through which Service Regulations affect the volume of exports of large manufacturers, while the evidence of such a channel is weaker for SME’s. Our estimates indicate that, from 1991 to 2007, large firms increased their volume of exports by an average of 20 per cent as a result of the direct input cost effect of Services reforms, such that the firms that benefited the most typically belonged to industries more dependent on Service inputs. Furthermore, convergence to the ‘best practice’ regulatory framework in Services would have raised exports at least by an additional nine per cent. We conclude that firm size is relevant for the connection between Services reforms, intermediate input prices and export volumes.
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Service Regulations input prices and export volumes evidence from a panel of manufacturing firms
Research Papers in Economics, 2017Co-Authors: Monica Correalopez, Rafael DomenechAbstract:Using a panel of firm-level data from Spanish manufacturers, this study shows that better Service Regulation reduces the price of intermediate inputs paid by downstream firms. The beneficial cost effects of Services reforms extend to both large and small-to-medium sized corporations (SMEs), but the former tend to enjoy greater gains. This feature also manifests itself in international markets. We identify an input cost channel through which Service Regulations affect the volume of exports of large manufacturers, while the evidence of such channel is weaker for SMEs. Our estimates indicate that, from 1991 till 2007, large firms increased their volume of exports by an average of 22% as a result of the direct input cost effect of Services reforms, such that the firms that benefited the most typically belonged to industries more dependent on Service inputs. Furthermore, convergence to the “best practice” regulatory framework in Services would have raised exports at least by an additional 10%. We conclude that firm size is relevant for the connection between Services reforms, intermediate input prices and export volumes
Panagiotis Delimatsis - One of the best experts on this subject based on the ideXlab platform.
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international trade in Services and domestic Regulations necessity transparency and regulatory diversity
Social Science Research Network, 2007Co-Authors: Panagiotis DelimatsisAbstract:In 2005 the WTO Appellate Body ruled that the United States' total prohibition on cross border gambling Services was unlawful under the General Agreement on Trade in Services (GATS). The questions raised by the case - whether and how a government could block the supply of Services on moral or public order grounds - went to the heart of key controversies surrounding international economic law. How can a liberal system of international trade in Services be reconciled with national governments' desire to protect social values through Service Regulation? How much regulatory sovereignty are the WTO Members willing to transfer to the WTO? How much regulatory diversity can the multilateral trading system withstand?This book comes to cover an important lacuna that exists when it comes to international trade in Services and its Regulation. It tackles one of the most controversial issues in the General Agreement on Trade in Services (GATS) nowadays, that is, the interplay between domestic Regulations and the international Regulation of Services trade and provides a comprehensive analysis of the Regulation of Services under the GATS. Through a thorough examination of the GATS negotiating history, substantive provisions, judicial interpretation, and ongoing reform process, the book presents a clear picture of how the multilateral trading system justifies and tolerates regulatory diversity in Services. In this respect, the book focuses on the core general principles of necessity and transparency, which would allow the assessment of the consistency with the GATS of domestic Regulations in Services at a horizontal, cross-sectoral level. In addition, the book reviews with a critical eye the ongoing GATS negotiations on the creation of rules on domestic Regulations.It is the ubiquity, complexity and regulatory intensity of trade in Services, as well as the novelty of the issues involved regarding the multilateral Regulation of Services that makes this book particularly interesting and indispensable for regulators, policymakers, negotiators, international trade lawyers as well as academia. My study takes a cross-sectoral approach and adopts an interdisciplinary stance. In addition, along with the WTO, it covers the relevant case-law in the European Union and takes into account significant recent developments at the regional level. Learning-by-doing is still a feature of regulating trade in Services, both multilaterally and nationally and, consequently, people dealing with trade in Services everyday may appreciate the qualities of this book in advancing research and knowledge on Services trade. A thorough analysis of relevant WTO case-law to date will also draw the attention of practitioners.For more information, visit the Oxford University Press website at: http://ukcatalogue.oup.com/product/9780199533152.do
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international trade in Services and domestic Regulations necessity transparency and regulatory diversity
Research Papers in Economics, 2007Co-Authors: Panagiotis DelimatsisAbstract:In 2005 the WTO Appellate body ruled that the United States' total prohibition on cross border gambling Services was unlawful under the General Agreement on Trade in Services (GATS). The questions raised by the case - whether and how a Government could block Service provision on moral grounds - went to the heart of key controversies surrounding international economic law. How do you reconcile a liberal system of international trade in Services with national governments' desire to protect social values through Service Regulation? How much control are the WTO members willing to transfer to the WTO? How much regulatory diversity can the international trading system withstand? This book provides a comprehensive analysis of the Regulation of Services under the WTO's GATS Agreement. Through a thorough examination of the GATS negotiation history, substantive provisions, judicial interpretation, and ongoing reform process, the book presents a clear picture of how the multilateral trading system justifies and tolerates regulatory diversity. In this respect, the book focuses on the core general principles of necessity and transparency, which would allow the assessment of the consistency with the GATS of domestic Regulations in Services at a horizontal, cross-sectoral level. In addition, the book reviews with a critical eye the ongoing GATS negotiations on the creation of rules on domestic Regulations.