We consider insurance markets with adverse selection and propose a mechanism under which a separating Nash equilibrium always exists (even when a Rothschild-Stiglizt equilibrium does not). This equilibrium is unique and always (interim) incentive efficient. In our setting, the Rothschild-Stiglizt equilibrium exists and coincides with ours only if the former is incentive efficient. Otherwise, ou...

In this paper, we investigate a non-zero-sum stochastic differential reinsurance-investment game problem between two insurers. Both insurers can purchase proportional reinsurance and invest in financial market that contains risk-free asset risky asset. We consider the insurers' wealth processes with delay to characterize bounded memory feature. For considering effec...

This paper demonstrates health insurers’ incentives to design benefits that differentially appeal to profitable enrollees and deter unprofitable enrollees in Medicare Part D. A system of diagnosis-specific payments was meant to neutralize insurer benefit design incentives by paying insurers more for the sick than for the healthy. These diagnosis-specific payments were held steady even as treatm...

This article presents a model to analyze consumer welfare, price, and competition in a three-way market among consumers, medical providers, and insurers. While insurers compete with each other for customers, they also act as collective bargaining agents on behalf of consumers in determining the equilibrium price of health care with providers. The entry of an additional insurer thus has contradi...

The Patient Protection and Affordable Care Act (ACA) set limits on insurers' overhead, mandating a medical loss ratio (MLR) of at least 80 percent in the individual and small-group markets and 85 percent in the large-group market starting in 2011. In implementing the law, the Obama administration introduced new rules that changed (and inflated) how insurers calculate MLRs, distorting time trend...

Obesity has become a major health concern in the United States. The number of patients seeking bariatric surgery has grown exponentially in recent years because of the proven success of weight-loss surgery, greater public acceptance, and the increasing number of insurers who will pay for these surgeries. Patients may seek bariatric revision procedures if the primary procedure does not achieve t...

Predictive genetic testing poses fundamental questions for disability insurance, a crucial resource funding basic needs when disability prevents income from work. This article, from an NIH-funded project, presents the first indepth analysis of the challenging issues: Should disability insurers be permitted to consider genetics and exclude predicted disability? May disabilities with a recognized...

Insolvencies of life insurers in Europe have been virtually nonexistent. The deregulation of European markets, however, is likely to dramatically alter that situation. The goal of this study is two-fold: first, to identify significant variables in the early detection of financially distressed life insurers; and second, to consider the importance of these variables to the evaluation of life insu...