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Full-Text Articles in Law
Third-Party Moral Hazard And The Problem Of Insurance Externalities, Peter Siegelman, Gideon Parchomovsky
Third-Party Moral Hazard And The Problem Of Insurance Externalities, Peter Siegelman, Gideon Parchomovsky
Faculty Articles and Papers
Insurance can lead to loss or claim creation not only by insureds but also by uninsured third parties. These externalities-which we call third-party moral hazard-arise because insurance creates opportunities both to extract rents and to recover otherwise unrecoverable losses. Using examples from health, automobile, kidnap, and liability insurance, we demonstrate that the phenomenon is widespread and important and that the downsides of insurance are greater than previously believed. We explain the economic, social, and psychological reasons for this phenomenon and propose policy responses. Contract-based methods that are traditionally used to control first-party moral hazard can be welfare reducing in the …
Does Small Group Health Insurance Deliver Group Benefits: An Argument In Favor Of Allowing The Small Group Market To Die, John Aloysius Cogan, Jr.
Does Small Group Health Insurance Deliver Group Benefits: An Argument In Favor Of Allowing The Small Group Market To Die, John Aloysius Cogan, Jr.
Faculty Articles and Papers
The small group health insurance market is failing. Today, fewer than one-third of small firms now offer health insurance and the number of people covered by small group insurance continues to drop. These problems invite the obvious question: What should be done about the small group market? Past scholarship on the small group market has largely focused on documenting the market's problems, evaluating the effectiveness of prior reform efforts, and proposing regulatory changes to stabilize the market. This Article takes a different approach to the small group problem by asking a previously unasked question: Does the small group market deliver …
Pension De-Risking, Brendan Maher
Pension De-Risking, Brendan Maher
Faculty Articles and Papers
The United States is facing a retirement crisis, in significant part because defined benefit pension plans have been replaced by defined contribution retirement plans that, whatever their theoretical merit, have left significant numbers of workers unprepared for retirement. A troubling example of the continuing movement away from defined benefit plans is a new phenomenon euphemistically called “pension de-risking.” Recent years have been marked by high-profile companies engaging in various actions designed to reduce the company’s exposure to pension funding risk (hence the term “pension de-risking”). Some de-risking strategies convert a federally-guaranteed pension into a more risky private annuity. Other approaches …
The Uneasy Case For Food Safety Liability Insurance, John Aloysius Cogan, Jr.
The Uneasy Case For Food Safety Liability Insurance, John Aloysius Cogan, Jr.
Faculty Articles and Papers
No abstract provided.
Health Insurance Rate Review, John Aloysius Cogan, Jr.
Health Insurance Rate Review, John Aloysius Cogan, Jr.
Faculty Articles and Papers
No abstract provided.
Information & Equilibrium In Insurance Markets With Big Data, Peter Siegelman
Information & Equilibrium In Insurance Markets With Big Data, Peter Siegelman
Faculty Articles and Papers
Asymmetric information makes the behavior of insurance markets very difficult to predict. But this Article argues that the increasing use of Big Data by insurers will not result in forecasts of loss that are so accurate that they eliminate uncertainty, and with it, the possibility of insurance. Big Data techniques might lead to a 'flip" in informational asymmetry, resulting in a situation in which insurers know more about their customers than the latter know about themselves. But the effects of such a development could actually be benign. Finally, the Article considers the potential for Big (or at least, More) Data …
Affordable Care Act, Remedy, And Litigation Reform, The, Brendan Maher
Affordable Care Act, Remedy, And Litigation Reform, The, Brendan Maher
Faculty Articles and Papers
The Patient Protection and Affordable Care Act of 2010 (“ACA”) rewrote the law of private health insurance. How the ACA rewrote the law of civil remedies, however, is — to date — a question largely unexamined by scholars. Courts everywhere, including the United States Supreme Court, will soon confront this important issue. This Article offers a foundational treatment of the ACA on remedy. It predicts a series of flashpoints over which litigation reform battles will be fought. It identifies several themes that will animate those conflicts and trigger others. It explains how judicial construction of the statute’s functional predecessor, the …
Liability Insurance And Gun Violence, Peter Kochenburger
Liability Insurance And Gun Violence, Peter Kochenburger
Faculty Articles and Papers
No abstract provided.
Review, From Industrial To Legal Standardization, 1871-1914: Transnational Insurance Law And The Great San Francisco Earthquake, Sachin Pandya
Review, From Industrial To Legal Standardization, 1871-1914: Transnational Insurance Law And The Great San Francisco Earthquake, Sachin Pandya
Faculty Articles and Papers
No abstract provided.
Improving Retirement Savings Options For Employees, James Kwak
Improving Retirement Savings Options For Employees, James Kwak
Faculty Articles and Papers
Americans do not save enough for retirement. One reason is that our retirement savings accounts — whether employer-sponsored defined-contribution plans such as 401(k) plans or individual retirement accounts — are heavily invested in actively managed mutual funds that siphon off tens of billions of dollars in fees every year yet deliver returns that trail the overall market. Under existing law, as interpreted by the courts, mutual funds may charge high fees to investors, and companies may offer expensive, active funds to their employees. This paper argues that the Employee Retirement Income Security Act should be reinterpreted, in light of basic …
Insurance And Climate Change, Peter Kochenburger, Joseph Macdougald
Insurance And Climate Change, Peter Kochenburger, Joseph Macdougald
Faculty Articles and Papers
Climate change started as a scientific theory, became the subject of environmental policy and international negotiation, and today manifests itself within the courts in a series of boundary testing cases that challenge the settled concepts of risk and redress available under both environmental and insurance law. As our climate becomes increasingly unstable and the causal link between damage from sea-level rise and severe weather events becomes ever more tangible and traceable, courts at all levels wrestle with varying avenues of legal authority, including: the limitations of legal redress through the political question doctrine the appropriateness of traditional federal and state …
Some Thoughts On Health Care Exchanges: Choice, Defaults, And The Unconnected, Brendan Maher
Some Thoughts On Health Care Exchanges: Choice, Defaults, And The Unconnected, Brendan Maher
Faculty Articles and Papers
One feature of the ACA that appealed to observers across the political spectrum was the creation of health insurance “exchanges.” Among other things, exchanges are intended to aid consumers in making simple and transparent choices regarding the purchase of health insurance. This Article considers how exchanges might benefit from the use of “default” options — both online and off. Given the significant number of Americans that have limited or no Internet access, offline defaults may be an attractive way to promote coverage of the “unconnected.”
The First Liability Insurance Cartel In America, 1896-1906, Sachin S. Pandya
The First Liability Insurance Cartel In America, 1896-1906, Sachin S. Pandya
Faculty Articles and Papers
This article studies the rise and fall of the first liability insurance cartel in the United States. In 1886, insurance companies in America began selling liability insurance for personal injury accidents, primarily to cover business tort liability for employee accidents at work and non-employee injuries occasioned by their business operations. In 1896, the leading liability insurers agreed to fix premium rates and share information on policyholder losses. In 1906, this cartel fell apart. Although largely forgotten until now, the rise and fall of this cartel confirms the expectations of both cartel theory and past studies of insurance cartels, largely in …
Benefits Of Opt-In Federalism, The, Brendan Maher
Benefits Of Opt-In Federalism, The, Brendan Maher
Faculty Articles and Papers
The Affordable Care Act (“ACA”) is a controversial and historic statute that mandates people make insurance bargains. Unacknowledged is an innovative mechanism ACA uses to select the law that governs those bargains: opt-in federalism. Opt-in federalism – in which individuals choose between federal and state rules – is a promising theoretical means to make and choose law. This Article explains why, and concludes that the appeal of opt-in federalism is independent of ACA. Whatever the statute’s constitutional fate, future policymakers should consider opt-in federalist approaches to answer fundamental but exceedingly difficult questions of health and retirement law.
The Affordable Care Act’S Preventive Services Mandate: Breaking Down The Barriers To Nationwide Access To Preventive Services, John Aloysius Cogan, Jr.
The Affordable Care Act’S Preventive Services Mandate: Breaking Down The Barriers To Nationwide Access To Preventive Services, John Aloysius Cogan, Jr.
Faculty Articles and Papers
No abstract provided.
Readability, Contracts Of Recurring Use, And The Problem Of Ex Post Judicial Governance Of Health Insurance Polices, John Aloysius Cogan, Jr.
Readability, Contracts Of Recurring Use, And The Problem Of Ex Post Judicial Governance Of Health Insurance Polices, John Aloysius Cogan, Jr.
Faculty Articles and Papers
While the rhetoric surrounding the passage of the Patient Protection and Affordable Care Act focused on core issues such as cost, quality, and access to care, the dialog rarely acknowledged a key problem-the fact that most Americans do not understand their health insurance. Simply put, consumers do not fully grasp their health insurance coverage because the jargon found in many health insurance contracts is impenetrable to most Americans. This is disconcerting because consumer-oriented information is central to our increasingly consumer-directed health care system. Consumers are expected to make cost-effective choices among the array of health insurance plans that may be …
Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Peter Siegelman, Tom Baker
Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Peter Siegelman, Tom Baker
Faculty Articles and Papers
Over one-third of the uninsured adults in the U.S. below retirement age are between nineteen and twenty-nine years old. Young adults, especially men, often go without insurance, even when buying it is mandatory and sometimes even when it is a low-cost employment benefit. This Article proposes a new form of health insurance targeted at this group, the "young invincibles"-those who (wrongly) believe that they do not need health insurance because they will not get sick. Our proposal offers a cash bonus to those who turn out to be right in their belief that they did not really need health insurance. …
The Language Of Lives, Jill Anderson
The Language Of Lives, Jill Anderson
Faculty Articles and Papers
No abstract provided.
Creating A Paternalistic Market For Legal Rules Affecting The Benefit Promise, Brendan Maher
Creating A Paternalistic Market For Legal Rules Affecting The Benefit Promise, Brendan Maher
Faculty Articles and Papers
Notwithstanding the fact that ERISA was enacted to protect employee benefits, courts have narrowly construed the relief available when benefits are denied, out of concern that a stronger remedy would be too costly for the system to bear. Judges, I argue, are ill-equipped to make this policy judgment. Instead, a regulated, subsidized, paternalistic market should be created to permit the benefit players themselves to choose and price the strength of the remedy they desire. This is a superior means to reach the right level of remedial strength for the most players. To protect against undesirably weak remedial options being selected, …
War, Insurance And Some Problems Of Community, Carol Weisbrod
War, Insurance And Some Problems Of Community, Carol Weisbrod
Faculty Articles and Papers
In War and Insurance (1914), Josiah Royce deals with several kinds of community, two obviously and one implicitly. The first is the community of interpretation, which he adapted from Peirce and used in the Problem of Christianity. The second is the Beloved or Universal Community, towards which this suggestion for the practical advancement of peace was headed. The third is the shattered or wounded community, implicit in War and Insurance in the form of the international community, which is injured by the nation that fires the first shot. This paper discusses these three communities against the background of several other …
Adverse Selection In Insurance Markets: An Exaggerated Threat, Peter Siegelman
Adverse Selection In Insurance Markets: An Exaggerated Threat, Peter Siegelman
Faculty Articles and Papers
The thesis of this Essay is that although theory demonstrates that adverse selection can occur, and some instances have certainly been documented, neither the theoretical models nor the empirical studies provide much support for its widespread importance in insurance markets. The nature of selection pressures turns out to be vastly more complicated than the rhetoric of courts and academic commentators would suggest. And while the economic theory of adverse selection in insurance markets has become enormously sophisticated, much of it is devoted to rarified analysis of the nature and existence of equilibria. It has thus managed to obscure some essential …
A Policy Overview, Stephen Utz
A New Old Look At Terrorism Insurance: Jack Hirshleifer's War Damage Insurance After Fifty Years, Peter Siegelman
A New Old Look At Terrorism Insurance: Jack Hirshleifer's War Damage Insurance After Fifty Years, Peter Siegelman
Faculty Articles and Papers
No abstract provided.
Insurance: How It Matters As Psychological Fact And Political Metaphor, Thomas Morawetz
Insurance: How It Matters As Psychological Fact And Political Metaphor, Thomas Morawetz
Faculty Articles and Papers
No abstract provided.
Insurance And The Utopian Idea, Carol Weisbrod
Insurance And The Utopian Idea, Carol Weisbrod
Faculty Articles and Papers
No abstract provided.
., Administrative Channeling Under The Medicare Act Clarified: Illinois Council, Section 45(H), And The Application Of Congressional Intent, John Aloysius Cogan, Jr., Rodney A. Johnson
., Administrative Channeling Under The Medicare Act Clarified: Illinois Council, Section 45(H), And The Application Of Congressional Intent, John Aloysius Cogan, Jr., Rodney A. Johnson
Faculty Articles and Papers
In non-legal terms, subject matter jurisdiction is much like your American Express card. You cannot "leave home without it." This is especially true if you represent a Medicare provider or supplier and intend to sue on a Medicare claim. To be sure, your well-pleaded complaint alleges several bases for the federal district court's subject matter jurisdiction, including, but not limited to, 28 U.S.C. § 1331 (federal question jurisdiction), 28 U.S.C. § 1346 (federal defendant jurisdiction), 28 U.S.C. § 1361 (mandamus), and 5 U.S.C. § 702 (the Administrative Procedures Act). Perhaps, your complaint is brought in the context of an adversary …
Retrofitting Unemployment Insurance To Cover Temporary Workers, Sachin Pandya
Retrofitting Unemployment Insurance To Cover Temporary Workers, Sachin Pandya
Faculty Articles and Papers
No abstract provided.
The Economics Of The Insurance Antitrust Suits: Toward An Exclusionary Theory, Peter Siegelman, Ian Ayres
The Economics Of The Insurance Antitrust Suits: Toward An Exclusionary Theory, Peter Siegelman, Ian Ayres
Faculty Articles and Papers
On March 22, 1988, the Attorneys General of eight states filed antitrust actions in state and federal courts' alleging that major insurance and reinsurance companies colluded to boycott specific types of insurance coverage in violation of section 1 of the Sherman Act. The suits suggest that this collusion was responsible for the unprecedented increase in premiums and concomitant erosion of coverage that has come to be known as "the insurance crisis."' The lawsuits have provoked fierce denials by insurance industry participants, including assertions that the suits, which came in an election year, were politically motivated.' The litigation is certain to …
Erisa Preemption And Indirect Regulation Of Employee Welfare Plans Through State Insurance Laws, Leslie Levin
Erisa Preemption And Indirect Regulation Of Employee Welfare Plans Through State Insurance Laws, Leslie Levin
Faculty Articles and Papers
The Employee Retirement Income Security Act of 1974 (ERISA), enacted to correct widespread abuses in the area of employee benefit plans, imposes federal minimum standards for plan reporting and disclosure, vesting, funding, and fiduciary responsibilities. To ensure national uniformity, section 514 preempts state laws that "relate to" employee benefit plans. Since ERISA affects many areas traditionally governed by state law, the extent to which states may continue to regulate certain activities whenever such regulation "relate[s] to" employee benefit plans has been the subject of much litigation.