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Abstract:
The Bankruptcy Abuse and Protection Act (BAPCPA) (2005) by making it more difficult and costly for marginal homeowners to utilize the bankruptcy code, restructure their debts, and maintain mortgage payments, increased foreclosures and the number of homes for sale. BAPCPA was intended to help creditors at the expense of debtors. However, the negative impact of BAPCPA on real estate markets appears to have damaged the balance sheets of both debtors and creditors.

personal bankruptcy, personal finances, financial institutions, consumer debt, mortgages

Abstract:
This paper uses data from the 2001 and 2007 American Housing Surveys (AHS) and the 2004 Survey of Consumer Finances (SCF) to document and assess the impact of increased use of home equity lines and decreased private mortgage insurance (PMI) on mortgage markets. The data confirms that in the years leading up to the mortgage crisis home buyers and lenders have aggressively used piggyback loans to avoid taking out PMI on first mortgages. Multiple-mortgage financing packages as a percent of newly originated mortgages (mortgages originated within the previous five years) went from 14.8% in survey year 2001 to 21.5% in survey year 2007. The multiple-mortgage percentage for seasoned mortgages (mortgages originated more than five years prior to the origination date) also increased by a modest amount. Further comparisons reveal a large decrease in the proportion of mortgages with PMI with the largest decreases in PMI coverage occurring among newly originated multiple-lien packages. Data from the SCF was used to compare five financial characteristics (credit card debt, installment loans, consumer credit, home-owners equity, and liquid assets) for multiple-lien versus single-lien households. The comparisons suggest single-lien households tend to have slightly stronger financial variables than multiple-lien households. The data does not support the view that homeowners with multiple liens are less risky and should therefore be allowed to avoid PMI. The reduced use of PMI and the increased use of home equity loans increased mortgage holder risk in several different ways and was a contributing factor to the 2008 mortgage and financial crisis. This change in lending and borrowing behavior is not a subprime market problem.

mortgages, private mortgage insurance, PMI, foreclosure, subprime, default

Abstract:
This presentation explores the impact of second liens on the 2007 and 2008 mortgage crisis and the ongoing financial rescue. The presentation relies on data from the 2001 and 2007 American Housing Surveys. The major questions addressed in this presentations are:

What happened to the use of second liens and private mortgage insurance (pmi) prior to the home mortgage crisis of 2007and 2008?

How much more risky are homes financed with multiple liens than homes financed through a single lien?

What is the size of a typical second lien compared to a first lien?

Why should a mortgage rescue plan deal primarily with seconds first?

How could the bankruptcy process be used to provide relief to struggling homeowners and deter future mortgage problems?

This file is a short (1,617 words plus seven tables) power-point styled presentation.

mortgages, foreclosure, bankruptcy, housing, financial crisis

Abstract:
This short paper is a discussion of issues involving Medicaid eligibility rules for nursing home benefits and Medicaid estate planning. The debate over the Medicaid long term care benefit is a classic example of the broader debate over the role of government and the role of the free market. One side of the debate stresses personal responsibility, the belief that private sector solutions are available for most individuals, and the view that the government role should be limited to helping the truly destitute. The other side of the debate believes government has a role in sharing catastrophic risks, especially if private market solutions are unaffordable.

Medicaid eligibility rules are governed by competing objectives. First, the government has an obligation to insure scarce Medicaid resources are used by needy households. Second, Medical eligibility formulas should not impoverish the spouse or family of the Medicaid recipient who remains in the community. This paper discusses five Medicaid eligibility issue: (1) the treatment of countable versus non-countable assets, (2) the transfer of assets between the nursing home and community spouse, (3) the use of annuities, (4) unanticipated inheritance, and (5) prohibitions against Medicaid planning that seek to balance between these competing objectives.

Medicaid, Long Term Care, Insurance, welfare, nursing home

Abstract:
This paper analyzes the potential impact of two different modifications to the bankruptcy code, which might reduce foreclosures and help end the mortgage crisis. The first type of modification involving repeal or modification of the newly enacted bankruptcy means test is motivated by two recent papers Bernstein (2008a) and Credit Suisse (2008), which found the 2005 bankruptcy law increased foreclosures. Changes in the means test could be applied to all debtors in bankruptcy (both homeowners and renters) or could be narrowly tailored towards homeowners facing foreclosure. The second proposed modification involves allowing for the revision of mortgages for households in bankruptcy. The economic literature does not rule out the possibility that providing broad authority for the revision of all mortgages in bankruptcy would adversely impact mortgage markets. However, limited mortgage revision authority for second liens, predatory first liens, and some non-predatory first liens would substantially reduce foreclosures and could create incentives for safer lending practices in the future. The economic case for allowing the revision of second liens in bankruptcy and for targeting mortgage rescue programs on second liens is especially compelling. The revision of second liens in bankruptcy would prevent many first-lien defaults, reduce financial institution losses, and would even reduce future first-lien interest rates. A rule allowing mortgage modifications on predatory loans in bankruptcy could help curb abusive lending practices. The revision of non-predatory first-liens in bankruptcy should be fairly limited and used only when other debt reduction options have been exhausted.

bankruptcy, foreclosure, second mortgage, predatory loan, BAPCPA, interest rate, risk, consumer credit

Abstract:
This paper provides an outline and an assessment of a new health care reform proposal. The centerpiece of the new proposal involves the creation of a combined private/public health plan for some eligible individuals. The new health insurance proposal combines a low-expenditure private health plan with access to Medicaid for individuals with expenses exceeding the allowed limit on the low-expenditure health plan. Three groups of individuals - (1) low-income people, (2) individuals who do not have access to group insurance, and (3) potentially high-expenditure individuals employed by small firms - are eligible for the new private/public health plan combination. The health reform package also includes tax credits to cover part of the costs of the low-expenditure plan, a guarantee-issue requirement on the low-expenditure plan, affordable age-rated and health-status rated premiums, and rules and incentives limiting crowding out of comprehensive health insurance.

health insurance, coverage, reinsurance, regulation, Medicaid

Abstract:
Current multi-pillar pension plans have adopted the same retirement age for the defined benefit (DB) and defined contribution (DC) components of the plan. This paper considers potential benefits obtainable from coordinating DB and DC benefits. The plan proposed here involves establishing an earlier standard retirement age for the DC component of the multi-pillar pension plan than for the DB component of the multi-pillar pension. Individuals who receive low returns on the DC pension plan are eligible for earlier non-standard disbursements from their DB pension plan. The lower standard retirement age on the DC component of the multi-pillar pension plan than on the DB component of the multi-pillar pension plan reduces costs of funding the DB plan while maintaining a lower overall potential retirement age for individuals. The possibility of non-standard early DB disbursements for retirees who realize low investment income reduces the instability of retiree income due to market fluctuations. A lower standard retirement age on the DC component of the multi-pillar pension plan than on the DB component of the multi-pillar pension plan provides an incentive for workers to delay retirement until reaching the standard DB retirement age. This work incentive does not increase costs for the DB plan.

social security, retirement, public pensions, social security reform, labor supply, investment risk

Abstract:
This paper evaluates the impact of three insurance policy parameters; the deductible, the coinsurance rate, and the out-of-pocket expense limit, on incentives for individuals to economize on health care spending, health plan costs, and household financial risk. High-deductible health plans are not highly effective at mitigating moral hazard problems associated with insurance because most individuals and most health care expenditure occurs from households with expenditures exceeding the plan deductible. High-deductible health plans are highly effective at reducing premiums because all individuals pay the entire deductible prior to receiving any insurance payments. Under some measures, high-deductible health plans impose less financial risk on households than high out-of-pocket or high coinsurance rate health plans. However, higher deductibles can impose substantial burdens on low-income households and reduce preventive medicine. The simulation results do not provide categorical guidance over the "best" form of cost sharing for health insurance policies.

health insurance, moral hazard, adverse selection, coinsurance, deductible, out-of-pocket limit

Abstract:
President-elect Obama has proposed taxing high-income individuals and using the funds to improve the solvency of the Social Security and Medicare Trust funds. Existing taxes, used to fund Social Security and Medicare, have only been applied to wages. Current proposals have been vague about what type of tax base might be used in the new tax. This note utilizes data from the Survey of Consumer Finances to compare potential advantages and disadvantages of a wages-only tax base proposal to a broader tax base proposal. The statistics from the Survey of Consumer Finances indicate a disproportionate number of high-income tax payers are dual-earner households and/or receive multiple types of income. The analysis shows a broad-based tax concept is more efficient than a wages-only tax concept for higher income households. Estimates presented here indicate the tax base for a tax based on broadly defined household income exceeding $500,000 could be 28 times larger than the tax base for a tax based exclusively on household wages over $500,000. The tax base for a broad income tax over $250,000 in broadly defined household income is around 2.5 times higher than the tax base for household wages over $250,000. The broad income tax base allows for lower marginal tax rates, limits incentives for reduced labor force participation among two-income households, and less tax avoidance than a wages-only tax base.

President-elect Obama's proposed new tax is not a particularly liberal idea. The new tax is essentially a flat tax with a very high income threshold. Expansion of this tax could at some point stimulate discussion on ways to reduce marginal tax rates for the general income tax.

A second related issue involves whether the new tax should result in increased Social Security benefits for impacted households. It is likely greater bipartisan support for this new tax could be obtained by linking the new tax to elimination of limits on contributions to Roth IRAs. Increased eligibility for Roth IRAs would also prove more effective at stimulating additional retirement savings for households near the tax threshold who were likely hurt by the recent market downturn.

taxation, tax base, Social Security, marginal tax rates, tax evasion, labor force participation

Abstract:
Proponents of vehicle buy back programs maintain the earlier retirement of older vehicles will reduce pollution, increase income for lower-income households and stimulate the automobile industry. This paper provides a brief assessment of costs and benefits of vehicle buy-back programs. There are environmental benefits from the early retirement of automobiles and light trucks; however, some pollutants are not closely related to vehicle age. Moreover, vehicle buy-back programs are unlikely to reduce consumption of gasoline by a substantial amount and may even increase gasoline consumption in the short run because vehicle age is associated with an increase in miles traveled. Vehicle buy-back programs are not unambiguously progressive because they will increase the price of older vehicles the only source of transportation for lower income groups. This analysis does NOT justify the creation of a national large scale vehicle buy back program. However, vehicle buy-back program targeting the highest emission vehicles and vehicles likely to fail emission inspections creates support for more stringent vehicle emission standards and systems, a proven method to reduce mobile source air pollution. It may be useful to expand subsidies for existing local vehicle buy-back programs and create incentives for the creation of these programs by additional municipalities.

environment, global warming, automobiles, cash for clunkers, vehicle buy-back, pollution Carbon monoxide, Hydrocarbons, Nitric Oxides, Carbon Dioxide

Abstract:
In the United States, over 90% of working-age adults with insurance receive their health insurance through their employer. However, not all employers offer employer sponsored insurance (ESI). Whether or not a worker receives an ESI offer is shown to be primarily impacted by family income and the size of the worker's employer. Other variables like age, health status, attitudes towards insurance, education, and whether a spouse has an ESI offer are significant but far less important than family income. A married worker with a spouse that does not have an ESI offer is more likely to have an ESI offer than a married worker with a spouse with an ESI offer. This ability to coordinate employment opportunities is an economic advantage for two-earner couples.

Abstract:
This paper examines the impact of home ownership on mobility and three labor market outcomes – unemployment, under-employment, and duration of unemployment in the United States over the 2005 to 2008 time period. The model used in this paper allows for estimation of a separate home ownership coefficient in 2008 to reflect the simultaneous recession and housing crisis. In general, homeowners tend to have more favorable labor market outcomes than renters even after accounting for socio-economic factors like education, marriage, and age. The recession and housing price decrease of 2008 made Americans less likely to relocate and this effect was larger for homeowners than for renters. Under-employment was the only one of three labor market outcomes that worsened for homeowners relative to renters in 2008.

homeownership, migration, mobility, unemployment, under-employment duration of unemployment

Abstract:
Many policy makers and economists support changes to the U.S. tax code to stimulate decreased reliance on employer sponsored insurance. However, the tax code is not the only law impacting the availability and price of group and non-group health insurance. Outcomes from a health care reform designed to expand coverage by replacing group insurance with non-group insurance depend on two closely related policy choices - the regulation of the non-group health care market and the amount of risk sharing. The replacement of the current system by a non-group market with minimal regulation and minimal or no cost sharing would benefit younger healthier insurance applicants over sicker or older applicants. A reform with an unlimited guarantee-issue requirement and community rating would simply mimic the current system. Younger adults who tend to be uninsured because of cost considerations or lack of access to employer sponsored insurance would likely remain uninsured. A reform expanding non-group health insurance markets is likely to include guaranteed-issue regulations, some restrictions on underwriting designed to balance the interest of sick versus healthy insurance applicants and cost sharing either among insurance firms or between the insurance industry and the government. There is, however, no consensus about the desired level of regulation in the new expanded non-group market. Cost sharing between the government and the insurance industry or with the insurance applicants is necessary to make guarantee-issue rules and rate regulations economically and politically viable. Proposals to fund tax credits for the non-group market through cuts in Medicaid will increase the risk pool of applicants for private insurance and complicate the twin objectives of providing health care to both sick and healthy individuals.

health car reform, non-group market, insurance coverage, health expenditures, regulation, cost sharing

Abstract:
Even though the State Child Health Insurance Program (SCHIP) has strong bipartisan support, the Bush Administration and the 110th Congress were unable to agree to a comprehensive reauthorization of the program. The Bush Administration disagreed with a bipartisan majority of the House of Representatives and a veto-proof majority in the U.S. Senate on a wide variety of SCHIP issues including: (1) the desired scope of coverage for children, (2) needed funding, (3) coverage of adults, (4) limitations on enrollment, (5) cost sharing, and (6) benefit packages. A review of legislative proposal reveals the compromise bill passed by Congress was substantially less ambitious than the bill sought by many Congressional Democrats. The most difficult economic problem associated with a successful SCHIP expansion involves control of crowding out, the tendency for an expansion of public health insurance to result in individuals switching from private to public insurance. In my view, the vetoed bill, while not perfect from any perspective, was a reasonable way to balance the goal of expanding coverage to the uninsured with the goal of limiting crowding out.

health insurance, State child health insurance program, coverage, benefits, cost sharing

Abstract:
As the election of 2008 approaches most of the attention of investors and workers is on mortgage defaults, the banking crisis and the stock market. Important changes occurring in the labor market are being overlooked. The monthly unemployment rate in August 2008, 6.1%, is around the 70th percentile of the 1949 to 2008 time period. The change in the unemployment rate between August 2007 and August 2008, 1.4 percentage points, was unusually large by historic standards for an economy that officially remains in an expansionary period. The unemployment rate is a lagging economic indicator and an increase in unemployment of this magnitude is more consistent with an economy in a recessionary or post recessionary period than for an economy in an economic expansion. If the new president inherits an economy that enters a recession the unemployment rate at the start date of the recession is likely to be higher than the unemployment rate at the start-date of most post World War II recessions. The average increase in the unemployment rate between the start date and end date of the last 10 recessions was 2.6 percentage points. On average, unemployment remained 1.7 percentage points higher nine months after the end of a recession than on the start date of the recession.

unemployment rate, business cycle, recession, expansion, unemployment, lagging indicator

Abstract:
This paper uses data from the 2006 Behavioral Risk Factor Surveillance (BRFSS) System and information on state health insurance regulation tabulated by the Center for Affordable Health Insurance (CAHI) to examine the impact of health limitations on the factors determining whether a working-age adult has health insurance. Separate models are estimated for a sample of individuals with health limitations and a sample of individuals with no health limitations. The models are estimated with two different sets of regulatory variables; a composite regulatory index and a small-group underwriting variable. The difference in coefficients between the healthy and unhealthy sample appear larger for the socioeconomic variables than for the regulatory variables. Results pertaining to the impact of regulation on health coverage appear to be small and sensitive to the choice of regulatory variable. There are at least two reasons why the estimated impact of state regulation on insurance coverage is small. First, 55% of workers who receive health insurance are covered by a self-insured plan, which is exempt from state insurance. This statistic likely understates the percent of health insurance not subject to state regulation because state regulation is generally confined to firms with 50 or fewer employees. Second, empirical proxies of the stringency of state health insurance regulation do not consider a number of important regulatory features including differences in rate-band regimes, underwriting standards, and enforcement procedures. Results from empirical studies of the determinants of insurance coverage (including this study) are only applicable to the current health insurance environment where individuals obtain health insurance through their employers. This type of empirical study will have little relevance to an environment where most people obtain their health insurance through the individual market rather than through the group market.

health insurance, coverage, regulation

Abstract:
Objective: To evaluate and compare the determinants of emergency room use and the determinants of in-office doctor visits. Data sources: Data on working age adults from the 2006 Medical Expenditures Panel (MEPS), consolidated public-use file. Study Design: Descriptive statistics and logistic regression models are used to evaluate the impact of income, insurance type, health status, and diseases on both in-office doctor’s visits and emergency room visits. Principal findings: Office-based doctor services are a “normal good” which increase in demand with income while emergency room services are an "inferior good" which decreases in demand with income. Marriage is associated with more office-based doctor visits and fewer emergency room visits. Health status, diseases, and insurance type have a larger impact on office-based doctor visits than on emergency room visits. The current use of doctors by Medicaid patients is highly concentrated and many Medicaid patients actually underutilize in-office doctor services given their health status. Conclusions: A health care reform effort seeking to both insure the uninsured and to move individuals from Medicaid to private insurance would have major ramifications for the utilization of in-office doctor and emergency room visits. The transition of working-age adults from Medicaid could prove difficult. Health care reform requires an increase in the physicians serving lower-income households.

health insurance, income effect, inferior good, normal good, emergency rooms, physician supply, health care reform, medicaid, coverage, tobit models, logistic models

Abstract:
The debate over bankruptcy law is generally thought of as a conflict between the rights of debtors and creditors. However, the U.S. government is now providing direct financial aid to financial institutions and to homeowners. Several potential revisions to the bankruptcy code could help homeowners avoid foreclosure and substantially reduce potential financial bailout costs for the taxpayer. The U.S. taxpayer now has an important stake in policy discussions on the bankruptcy code.

taxes, bankruptcy, foreclosure, mortgages, credit card debt

Abstract:
Objective: To assess the impact of attitudes towards risk and preference for insurance on the demand for insurance by young adults.

Data Sources & Study Setting: Our analysis is based on survey data from the 2005 Medical Expenditures Panel (MEPS). All respondents included in the study are between the age of 26 and 35 inclusive.

Study Design: Simple univariate statistics on insurance coverage, economic status, socio-economic variables, and attitudes towards risk and insurance are compared for the 26-to-30 year-old age group to the 31-to-35 year-old age group. Logistical regression models are estimated to determine the impact of attitudes towards risk on the likelihood a person lacks insurance for the entire year, the likely of not having insurance for at least one month in the year, or the likelihood of not having an offer of employment sponsored insurance (ESI). Separate logistic health insurance coverage models are estimated for young adults with an ESI offer and young adults without an ESI offer.

Principal Findings: Older young adults are more likely to have health coverage than younger young adults because they have higher family income, are more likely to be married, and are more likely to be employed at a position offering ESI. Attitudes toward risk and the value of insurance are not closely associated with the insurance coverage and ESI offer variables, estimated over the entire sample. Attitudes toward risk have a larger impact on health insurance coverage for young adults who do not have an ESI offer than for young adults with an ESI offer. Marriage is closely associated with young adults obtaining health insurance coverage especially in the ESI system.

Conclusions: The results presented here indicate young adults lack insurance coverage because of basic economic and socio-economic variables rather than a higher acceptance of risk. An expansion of health coverage for young adults requires the adoption of more affordable options. Efforts to educate or persuade young adults to purchase existing health care options are not likely to prove to be effective.

uninsured, health insurance, risk, income, preferences

Abstract:
This paper contains nine different essays on Social Security reform and multi-pillar pension plans. The nine topics are:

1. Transition costs 2. Progressive indexation 3. Government guarantees on private accounts 4. Life cycle investing 5. Impact of add-on accounts on Social Security solvency 6. Administrative costs on multi-pillar pension plans 7. Potential lessons on Social Security reform from Argentina 8. Automatic adjustment mechanisms in Germany 9. Universal accounts and social security

Social Security, Life Cycle Investing, Multi-pillar Pension Plans, Progressive Indexation, Transition Costs, Universal Accounts

Abstract:
This paper uses the prisoner’s dilemma game to explain why the financial services industry refuses to provide financial relief to homeowners even though the failure to provide meaningful relief has exacerbated the decline in home prices and has led to more foreclosures and losses for the industry.

game theory, prisoners dilemma, mortgage revision, shared appreciation mortgage, second mortgage, regulation

Abstract:
This paper assesses the likely impact of health care reforms that shift health insurance from group to individual markets on working-age adults with diabetes. In the current system, working-age diabetics are less likely to have private insurance but more likely to have some insurance than non-diabetic individuals. Lower-income unhealthy diabetics are highly dependent upon Medicaid. Proposals that eliminate or reduce the role of Medicaid would substantially increase the risk profile of the private market. In an unregulated individual market, there would be strong incentives for insurance firms to deny coverage and charge higher rates to diabetics with certain health complications or diabetics who follow certain regimens. Financial outcomes from a shift towards the individual market are likely to be especially severe for younger type 1 diabetics. Risk adjustment procedures may reduce but are unlikely to eliminate these selection procedures. Results for individuals with other types of chronic diseases from health care reform may be similar to results for diabetics.

health insurance, health reform, coverage

Abstract:
This paper uses data from the 1999 to 2005 Medical Expenditures Panels (MEPS) to evaluate issues pertaining to the impact of family income and insurance coverage on Emergency Department (ED) utilization by working-age adults. In the current health care system, working-age uninsured and publicly insured working-age adults are highly dependent on ED services for their health care. However, ED utilization by the uninsured working-age population is lower than the ED utilization for the privately insured population. Repeat-ED usage is higher for the uninsured than for the privately insured. One out of every four publicly insured working-age adults will use an ED room at some point during the year and one of ten will be a repeat ED visitor. ED expenditures by the uninsured and publicly insured are around 23% of total ED expenditures and 0.7% of total health care expenditures. Reductions in ED compensation from treating the uninsured or publicly insured individuals will have very little impact on total health care expenditures but will have a substantial impact on ED budgets. Economists have defined an "inferior" good as a good or service with decreased consumer demand at higher income levels. The evidence presented here suggests emergency room services are an inferior good as defined in the economics literature. However, inferiority in the context of the microeconomic definition pertains exclusively to the income elasticity of demand and is not a commentary on either the quality or importance of services.

health insurance, demand, emergency room, health care

Abstract:
Abstract: This paper examines issues with the use of reinsurance programs to expand health insurance coverage to younger adults, older adults, and households that have a member with a pre-existing condition. Reinsurance programs could reduce insurance company losses and risk in the small-group and non-group markets. However, even with reinsurance specific cohorts will still have a difficult time obtaining affordable health insurance. Reinsurance could be part of a health care reform package of the multi-payer insurance system but an effective reform would have to include incentives or mandates spurring coverage by younger healthier adults and guaranteeing affordable access regardless of age or health status.

reinsurance, health insurance, coverage, uninsured, regulation, community rating, guarantee issue age-adjusted rating modified community rating

Abstract:
This paper considers whether long term care insurance (LTCI) should receive preferences under the tax code. The analysis in this paper supports the view that additional tax incentives should not be used to stimulate the sale of LTCI. First, funding for long term care should not automatically take precedence over other savings goals like purchasing adequate life insurance, health insurance, and saving for retirement. Second, while many experts believe that LTCI products are substantially improved compared to products previously sold on the market there are still significant problems with many LTCI policies on the market. These problems include: (1) inappropriate sales of replacement policies, (2) the risk of general premium increases, (3) transferring policy obligations to an under-funded state organization, (4) inflexible benefit, (5) Policy-lapse risk, (6) issues pertaining to adverse selection, and (6) affordability. Tax incentives that stimulate the sale of LTCI through 401(k) plans are shown to be especially problematic because diversions of 401(k) savings for the purchase of long term care insurance will increase the number of workers who end their career with insufficient funds for their retirement.

insurance, long term care insurance, retirement, 401(k)

Abstract:
There are more than 5 times as many 30-year mortgages than 15-year mortgages in circulation even though the 15-year mortgage interest rate is consistently lower than the 30-year mortgage interest rate. The relative popularity of longer term 30-year mortgages can be attributed both to the tax deduction for mortgage interest and the inability of many individuals to afford payments on a shorter term 15-year mortgages. The use of shared appreciation mortgages (SAMs) can make 15-year mortgages affordable to homebuyers. The impact of SAMs combined with the use of 15-year mortgages on wealth accumulation depends on mortgage interest rates and capital gains. Calculations presented in this paper examine the wealth accumulation of different mortgage arrangements based on historic interest rates and different capital gain assumptions.

mortgage, shared appreciation mortgage, capital gain, housing equity

Abstract:
Current high-risk pools insure around 190,000 high-risk individuals at a total cost of around $9,400 per enrollee. Expanding high risk pools so they insure a total of one million individuals would necessitate raising an additional $7.6 billion in revenue through premiums, allocations on insurance firms, through government subsidies and other sources. A proposal under consideration by Congress would insure around 60,000 additional individuals. There are around 3.5 million people who are uninsured the entire year and cannot obtain private insurance because of health considerations. Health insurance plans offered by high-risk pools are generally too expensive for lower-income individuals. Efforts to reach lower-income individuals through high-risk pools would require larger subsidies, which would involve either more public funds or a reduction in the number of people insured. Current high-risk pools do not serve individuals who have offers of employer sponsored insurance (ESI) and will therefore not impact the price or availability of ESI from small firms.

Abstract:
Congress and the Administration are considering the possibility of taxing excessive employer sponsored insurance (ESI) benefits. This paper considers issues associated with the proposed tax on generous ESI plans. The primary purpose of a tax on ESI benefits is to restrain the growth of health insurance premiums and utilization rather than to directly raise revenue. A tax that restrains health care utilization would create economic efficiencies and reduce tax expenditures associated with ESI sponsored health insurance. An equitable ESI benefit tax would require government regulation to insure that it was imposed on firms offering generous health insurance plans instead of small undiversified firms that are charged high premiums because of their high-risk, older or sick workforce.

tax, health reform, employer sponsorred insurance, benefits, premiums

Abstract:
Four factors suggest that population aging will have a larger fiscal impact in states with a high reliance on income taxes than in states with a high reliance on other taxes. First, as postulated by life-cycle consumption models, retirement has a larger impact on income than consumption. This life-cycle effect causes income tax receipts to fall more than sales tax receipts. Second, slower macroeconomic growth, which may occur because of population aging, will disproportionately impact income tax receipts. Third, preferences accorded elderly taxpayers substantially decrease income tax receipts. Fourth, the migration of high-income elderly taxpayers has an especially large impact on state income tax receipts.

state taxation, population aging, demographics

Abstract:
The current economic environment is dominated by two major concerns: (1) a large increase in the number of homeowners with negative equity in their house, and (2) a large and sharp increase in the unemployment rate. Individuals with negative equity are often unable to sell their home, recoup the outstanding balance on their mortgage and relocate to a new employment opportunity. As a result, economic shocks to real estate markets have the potential to increase the unemployment level. The existence of a positive relationship between the number of negative-equity households and unemployment could help justify financial assistance to homeowners with negative equity who must relocate for new job opportunities.

This paper uses data from the Panel Study of Income Dynamics (PSID) to estimate a logistical regression model for a single long term unemployment variable. The results presented here indicate renters have a higher likelihood of long term unemployment than all homeowners regardless of equity level. These results also indicate higher long-term unemployment likelihoods for low-equity homeowners than for high-equity homeowners, even after accounting for age, marital status, and educational attainment. The results are preliminary and limited. Future research is needed to consider alternative definitions of household unemployment or under-employment, alternative samples covering years with greater economic turmoil, and a more sophisticated, less parsimonious model.

housing, mortgages, unemployment, foreclosures, logistic model

Abstract:
This presentation uses MEPS data to compare and assess the part-year and full-year uninsured rates for different age groups. Four empirical questions are considered:

(1) How and why do adult and child part-year and full-year insurance coverage rates and trends differ?

(2) How does family income of uninsured adults differ from family income of uninsured children?

(3) How does the health status of young-adult uninsured individuals differ from the health status of older-adult uninsured individuals for different insurance coverage definitions and age groups?

(4)How does unemployment impact the size of the part-year and full-year uninsured populations?

Policy questions pertaining to these empirical results include:

(1) How successful has the State Child Health Insurance Program (SCHIP) been in reducing the number of children with full-year and part-year insurance coverage gaps?

(2)What are the advantages and disadvantages of focusing health reform initiatives on children versus focusing health reform initiatives on adults?

(3)Are policies that help young uninsured adults likely to help older uninsured adults?

(4)What policies might help reduce the uninsured rate for families who temporarily lose their job due to layoffs?

health insurance, uninsured, health status, family income, coverage

Abstract:
This paper considers the impact of murder and accidental death on both the relative level and change of U.S. life expectancy compared to other industrial nations. The analysis presented here suggests that previous work relating lower U.S. life expectancy to higher U.S. murder and accident rates involved incorrectly specified econometric models. Changes in U.S. murder and accident rates over time do not explain the lower improvement in U.S. life expectancy relative to improvements in life expectancy in other developed nations. Even though U.S. murder and accident rates have declined since the 1970s improvements in U.S. life expectancy continue to lag improvements in other developed countries. Moreover, the lower improvement in U.S. life expectancy is largely a result of lower improvements in survivor rates in older cohorts with low murder and accidental death rates.

Abstract:
This paper considers the use of an inheritance tax and payout restrictions to fund guarantees on a multi-pillar pension plan. A simulation model for a guaranteed multi-pillar benefit based on a pension plan similar to the old Chilean pension system reveals that the delivery of an economically viable guaranteed benefit requires strict control of disability benefits and significant inter-cohort transfers. Asset transfers from cohorts receiving high returns on their DC plans can be realized by controlling DC plan payouts and by taxing excess funds in the DC plan upon death of the plan’s member and spouse. Benefits guarantees do create an incentive for workers to invest in risky assets. However, this moral hazard might not be detrimental to the Defined Benefit (DB) component of the multi-pillar plan because historically risky assets have realized higher returns and under the plan considered here the DB component of the multi-pillar plan benefits when returns are high.

Social Security, multi-pillar pension plans, defined benefit plans, defined contribution plans, estate taxes, guarantees

Abstract:
Several researchers have argued that the Current Population Survey (CPS) undercounts the number of individuals on public insurance and as a result overstates the number of individuals who are uninsured. This paper compares survey estimates from the CPS to estimates from the Medical Expenditures Panel (MEPS). The CPS estimates for both the size of the Medicaid and uninsured populations are above the full-year MEPS estimate but below the at-least-part-year MEPS estimate. The CPS does not appear to overstate the number of uninsured because CPS uninsured estimates are only slightly higher than MEPS full-year uninsured estimates and MEPS data clearly demonstrate that many people are uninsured for only part of the year.

Medicaid, uninsured, Current Populations Survey, Medical Expenditure Panel, Medicaid undercount

Abstract:
This paper considers the impact of population aging on tax competition among states. The analysis presented here suggests that fiscal impacts associated with tax competition will be substantially larger once the baby boom generation retires.

states, population aging, taxation, capital gains, dividends, income taxes