Optimal non-linear health insurance

Blomqvist, Åke

doi:10.1016/s0167-6296(96)00529-2

Cited by 70 publications

(72 citation statements)

References 8 publications

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“…This concept was introduced by Arrow 20 in health insurance markets. Pauly, 21 Zeckhauser, 22 Spence and Zeckhauser (1971), Blomqvist (1997), Cutler and Zeckhauser 7 and Goldman and Philipson (2007) derived optimal reimbursement policy in the presence of ex-post moral hazard. The idea beyond all of these studies is an expected utility maximisation subject to zero profit of insurance company.…”

Section: Theoretical and Empirical Backgroundmentioning

confidence: 99%

“…Following Spence and Zeckhauser (1971), Blomqvist (1997) and Bajari et al, 27 we specify representative consumer's utility as a function of their wealth (w), nature's action (y) which reflects external shocks on their health status, and the choice variable of individuals (m), which can be treated as the invested amount of money on their health. We consider (m) as the total expenditures on medicine and paraclinical services.…”

Section: The Analytical Frameworkmentioning

confidence: 99%

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Analysis of Adverse Selection and Moral Hazard in the Health Insurance Market of Iran

Haddad

Anbaji

2010

Geneva Pap Risk Insur Issues Pract

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This paper aims to estimate a demand model for health insurance and medical care in Iran, in the presence of heterogeneous and latent health status of individuals; moreover it tests the asymmetry of information in the health insurance market. Our data set have been taken from the Households' expenditures survey (2006) of Iran. Parameters of the model are estimated by the Generalized Method of Moments (GMM) and the presence of asymmetric information (adverse selection and moral hazard) is tested by a non-parametric econometric method. The analytical model is specified under minimal assumptions on the selection process of different insurance categories and the statistical distribution of individual's latent health status. The findings confirm the presence of adverse selection hypothesis in personally purchased health insurance and moral hazard in all health insurance categories.

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Section: Theoretical and Empirical Backgroundmentioning

confidence: 99%

Section: The Analytical Frameworkmentioning

confidence: 99%

Analysis of Adverse Selection and Moral Hazard in the Health Insurance Market of Iran

Haddad

Anbaji

2010

Geneva Pap Risk Insur Issues Pract

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“…What remains observable is health care expenditure (HCE), and the optimizing instrument in the hands of the insurer is once more the degree of cost sharing. As shown by Zeckhauser (1970) and more recently Blomqvist (1997), a cost-sharing rule that is non-linear in expenditure turns out to be generally optimal. For example, Buchanan et al (1991) simulate optimal insurance policies to arrive at a $200 deductible and a 25% coinsurance rate, whereas Blomqvist (1997) comes up with a cost sharing of 27% at roughly $1,000 and declining to 5% at roughly $30,000.…”

Section: Discussionmentioning

confidence: 94%

The case for risk-based premiums in public health insurance

Zweifel

Breuer

2006

HEPL

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Uniform, risk-independent insurance premiums are accepted as part of 'managed competition' in health care. However, they are not compatible with optimality of health insurance contracts in the presence of both ex ante and ex post moral hazard. They have adverse effects on insurer behaviour even if risk adjustment is taken into account. Risk-based premiums combined with means-tested, tax-financed transfers are advocated as an alternative. Abstract: Uniform, risk-independent insurance premiums are accepted as part of 'managed competition' in health care. However, they are not compatible with optimality of health insurance contracts in the presence of both ex ante and ex post moral hazard. They have adverse effects on insurer behaviour even if risk adjustment is taken into account. Risk-based premiums combined with means-tested, tax-financed transfers are advocated as an alternative.

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“…These other factors are beyond the scope of this paper but include patients' degree of risk aversion; the extent to which patient charges affect the use of dental services; and the oral health benefits of particular treatments. [2][3][4][5] Another issue not discussed in this paper is the form of patient charges. Both in Scotland and England these are in the form of user charges, which depend upon the use of the GDS.…”

Section: Resultsmentioning

confidence: 99%