Adverse selection, moral hazard, and wealth effects in the medigap insurance market

Wolfe, John R.; Goddeeris, John H.

doi:10.1016/0167-6296(91)90024-h

Cited by 113 publications

(83 citation statements)

References 10 publications

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“…The main reason for using different estimation methods is that most empirical research on health insurance and medical care utilization is based on cross-sectional analyses (e.g. Jones et al, 2006;Stabile, 2001;Gruber and Poterba, 1994;Wolfe and Goddeeris, 1991;Savage and Wright, 2003;Harmon and Nolan, 2001;Holly et al, 1998;Hurd and McGarry, 1997;Blumberg et al, 2001;Chernew et al, 1997;Liu and Chen, 2002;Vera-Hernández, 1999;Bundorf et al, 2005;Ettner, 1997;Cameron et al, 1988). Using different estimation methods we can assess better whether our results conform with other findings in the literature and how deviations from these models change the estimation results.…”

Section: Empirical Modelsupporting

confidence: 50%

A dynamic analysis of the demand for health insurance and health care

Bolhaar

Lindeboom

Klaauw

2012

European Economic Review

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We investigate the presence of moral hazard and advantageous or adverse selection in a market for supplementary health insurance. For this we specify and estimate dynamic models for health insurance decisions and health care utilization. Estimates of the health care utilization models indicate that moral hazard is not important. Furthermore, we find strong evidence for advantageous selection, largely driven by heterogeneity in education, income and health preferences.Finally, we show that ignoring dynamics and unobserved fixed effects changes the results dramatically.

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Section: Empirical Modelsupporting

confidence: 50%

A dynamic analysis of the demand for health insurance and health care

Bolhaar

Lindeboom

Klaauw

2012

European Economic Review

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“…However, panel data allows to develop an indicator of health status from prior HCE (see Van Kleef et al [2008], Lehmann and Zweifel [2004], Wolfe and Godderies [1991]). In particular, Lehmann and Zweifel show that residuals from a random-effects Tobit regression of prior HCE on exogenous variables can serve as a proxy for unobserved health.…”

Section: Developing a Proxy For Unobserved Health Statusmentioning

confidence: 99%

Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?

Trottmann

Zweifel

Beck

2012

Journal of Health Economics

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Microeconomic theory predicts that if patients are fully insured and providers are paid fee-forservice, utilization of medical services exceeds the efficient level ('moral hazard effect'). In Switzerland, both demand-side cost sharing and upply-side cost sharing have been introduced to mitigate this problem. Analyzing a panel dataset of about 150,000 adults, we find both types of cost sharing to be effective in curtailing the use of medical services. However, demand-side cost sharing options are preliminarily chosen by individuals in excellent health, causing 'true' cost savings achieved by supply-side cost sharing to be more important. adults, we find both types of cost sharing to be effective in curtailing the use of medical services. However, demand-side cost sharing options are preliminarily chosen by individuals in excellent health, causing 'true' cost savings achieved by supply-side cost sharing to be more important.

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“…The results on risk selection, found there was little relationship between observed health measures and the propensity to hold or purchase private insurance and argued that the differences in health care services reflect moral hazard rather than adverse selection. There is also evidence of advantageous selection into Medigap, and factors other than health status such as 30 Wolfe and Goddeeris (1991). 31 Ettner (1997).…”

Section: Measuring Healthmentioning

confidence: 99%

Prescription Drug Coverage and Medicare Spending among U.S. Elderly

Shang

Goldman

2010

Geneva Pap Risk Insur Issues Pract

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The introduction of Medicare Part D has generated interest in the cost of providing drug coverage to the elderly. Of paramount importance-often unaccounted for in budget estimates-are the salutary effects that increased prescription drug use might have on other Medicare spending. This paper uses longitudinal data from the Medicare Current Beneficiary Survey to estimate how prescription drug benefits affect Medicare spending. We compare spending and service use for Medigap enrollees with and without drug coverage. Owing to concerns about selection, we use variation in supply-side regulations of the individual insurance market-including guaranteed issue and community rating-as instruments for prescription drug coverage. We employ a discrete factor model to control for individual-level heterogeneity that might induce bias in the effects of drug coverage. We find Medigap prescription drug coverage significantly increases drug spending and reduces Medicare Part A spending. Medigap prescription drug coverage reduces Medicare Part B spending, but the estimates are not statistically significant. Furthermore, the substitution effect decreases as income rises, and thus provides support for the low-income assistance program of Medicare Part D.

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Adverse selection, moral hazard, and wealth effects in the medigap insurance market

Cited by 113 publications

References 10 publications

A dynamic analysis of the demand for health insurance and health care

A dynamic analysis of the demand for health insurance and health care

Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?

Prescription Drug Coverage and Medicare Spending among U.S. Elderly

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