Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?

@article{AronDine2015MoralHI,
  title={Moral Hazard in Health Insurance: Do Dynamic Incentives Matter?},
  author={Aviva Aron-Dine and Liran Einav and Amy N. Finkelstein and Mark R. Cullen},
  journal={Review of Economics and Statistics},
  year={2015},
  volume={97},
  pages={725-741}
}
Abstract Using data from employer-provided health insurance and Medicare Part D, we investigate whether health care utilization responds to the dynamic incentives created by the nonlinear nature of health insurance contracts. We exploit the fact that because annual coverage usually resets every January, individuals who join a plan later in the year face the same initial (“spot”) price of health care but a higher expected end-of-year (“future”) price. We find a statistically significant response… Expand
Disentangling Moral Hazard and Adverse Selection in Private Health Insurance.
TLDR
This work uses claims data from a large firm which changed health insurance plan options to isolate moral hazard from plan selection, estimating a discrete choice model to predict household plan preferences and attrition and statistically reject that individual health care consumption responds solely to the end-of-the-year marginal price. Expand
Should There Be Vertical Choice in Health Insurance Markets?
We study the welfare effects of offering choice over coverage levels––“vertical choice”––in regulated health insurance markets. Though the efficient level of coverage, which trades off the value ofExpand
Physician pricing behavior: Evidence from an Australian experiment
Abstract We examine the unregulated pricing behavior of physicians in response to an exogenous decrease in patient entitlements under a government scheme providing insurance for high out-of-pocketExpand
Moral Hazard and Adverse Selection in Private Health Insurance
Moral hazard and adverse selection create inefficiencies in private health insurance markets. The authors use claims data from a large firm to study the independent roles of both moral hazard andExpand
Are Health Care Consumers Forward-Looking ?
A fundamental question in health insurance markets is how do health care consumers dynamically optimize their medical utilization under non-linear insurance contracts? Our paper tests theExpand
Spot price biases in non-linear health insurance contracts
Abstract We study an apparent schism in the literature concerned with non-linear health insurance plans: consumers exposed to the same type of policy appear forward-looking and rational in theirExpand
The Response to Dynamic Incentives in Insurance Contracts with a Deductible: Evidence from a Differences-in-Regression-Discontinuities Design
We develop a new approach to quantify how patients respond to dynamic incentives in health insurance contracts with a deductible. Our approach exploits two sources of variation in aExpand
Horizon Effects and Adverse Selection in Health Insurance Markets
We study how increasing contract length affects adverse selection in health insurance markets. Although health risks are persistent, private health insurance contracts in the United States haveExpand
Insurance‐Induced Moral Hazard: A Dynamic Model of Within‐Year Medical Care Decision Making Under Uncertainty
Health insurance may lead individuals to overconsume medical care. Many studies explore this moral hazard using models that aggregate medical care decisions up to the annual level. UsingExpand
Essays in the economics of health, risk, and behavior
The first chapter examines consumer choices of health insurance contracts. An important innovation in health insurance design is a high-deductible health plan paired with a health savings accountExpand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 38 REFERENCES
Moral Hazard in Health Insurance: How Important is Forward Looking Behavior?
We investigate whether individuals exhibit forward looking behavior in their response to the non-linear pricing common in health insurance contracts. Our empirical strategy exploits the fact thatExpand
Selection on Moral Hazard in Health Insurance
TLDR
It is shown that, at least in this context, abstracting from selection on moral hazard could lead to over-estimates of the spending reduction associated with introducing a high-deductible health insurance option. Expand
Asymmetric information in health insurance: evidence from the National Medical Expenditure Survey.
TLDR
A structural model of health insurance and health care choices using data on single individuals from the NMES is estimated and it is found that riskier types buy more coverage and, on average, end up using more care. Expand
Adverse Selection and Inertia in Health Insurance Markets: When Nudging Hurts.
  • B. Handel
  • Economics, Medicine
  • The American economic review
  • 2013
TLDR
A major change to insurance provision that occurred at a large firm is leveraged to identify substantial inertia, and a choice model is developed and estimated that also quantifies risk preferences and ex ante health risk. Expand
Health insurance and the demand for medical care: evidence from a randomized experiment.
TLDR
This work estimates how cost sharing, the portion of the bill the patient pays, affects the demand for medical services and rejects the hypothesis that less favorable coverage of outpatient services increases total expenditure. Expand
The Rand Health Insurance Experiment, Three Decades Later
TLDR
The famous RAND Health Insurance Experiment is re-present and the famous RAND estimate that the elasticity of medical spending with respect to its out-of-pocket price is -0.2 is considered, emphasizing the challenges associated with summarizing the experimental treatment effects from non-linear health insurance contracts using a single price elasticity. Expand
Estimating the Tradeoff between Risk Protection and Moral Hazard with a Nonlinear Budget Set Model of Health Insurance
TLDR
A nonlinear budget set model of health insurance that allows for both the welfare gains from risk protection and the welfare losses from moral hazard simultaneously is developed. Expand
The demand for episodes of treatment in the Health Insurance Experiment.
TLDR
Analysis of claims data from the RAND Insurance Experiment complements analyses of annual medical spending by revealing more about how decisions to spend are made within the year. Expand
Claim Timing and Ex Post Adverse Selection
Many health care treatments are not urgent and may be delayed if patients so choose. Because insurance coverage is typically determined by the treatment date, individuals may have incentives toExpand
Rational behavior in the presence of coverage ceilings and deductibles
Consumers of health care services with insurance plan features such as deductibles, copayments, and coverage ceilings, in which the price of health care depends upon expenditures accumulated during aExpand
...
1
2
3
4
...