HubMed - health insurance
Moral hazard and selection among the poor: Evidence from a randomized experiment.
J Health Econ. 2012 Jan 3; 31(1): 72-85
Spenkuch JL
Not only does economic theory predict high-risk individuals to be more likely to purchase insurance, but insurance coverage is also thought to crowd out precautionary activities. In spite of stark theoretical predictions, there is conflicting empirical evidence on adverse selection, and evidence on ex ante moral hazard is very scarce. Using data from the Seguro Popular Experiment in Mexico, this paper documents patterns of selection on observables into health insurance as well as the existence of non-negligible ex ante moral hazard. More specifically, the findings indicate that (i) agents in poor self-assessed health prior to the intervention have, all else equal, a higher propensity to take up insurance; and (ii) insurance coverage reduces the demand for self-protection in the form of preventive care. Curiously, however, individuals do not sort based on objective measures of their health.
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Google Videos - health insurance
Its about economy of scale. When you sign up for healthcare coverage, you join a group of other people to combine your healthcare purchasing power ...
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