Credit, Default, and Optimal Health Insurance

  title={Credit, Default, and Optimal Health Insurance},
  author={Youngsoo Jang},
  journal={Health Care Law \& Policy eJournal},
  • Youngsoo Jang
  • Published 1 July 2019
  • Economics, Medicine, Political Science
  • Health Care Law & Policy eJournal
How do defaults and bankruptcies affect optimal health insurance policy? I answer this question using a life-cycle model of health investment with the option to default on emergency room (ER) bills and financial debts. I calibrate the model for the U.S. economy and compare the optimal health insurance in the baseline economy with that in an economy with no option to default. With no option to default, the optimal health insurance is similar to the health insurance system in the baseline economy… 
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