Deductibles in Health Insurance: Pay or Pain?
AbstractWe study a health-insurance market where individuals are offered coverage against both medical expenditures and losses in income. Individuals vary in their level of innate ability. If there is private information about the probability of illness and an individual’s innate ability is sufficiently low, we find that competitive insurance contracts yield screening partly in the form of co-payment, i.e., a deductible in pay, and partly in the form of reduced medical treatment, i.e., a deductible in pain.
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Bibliographic InfoPaper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2002:13.
Length: 17 pages
Date of creation: 29 Jun 2009
Date of revision:
Contact details of provider:
Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
Phone: 2307 5309
Fax: 2307 5310
Web page: http://www.hero.uio.no/eng.html
More information through EDIRC
Health insurance; adverse selection; deductibles;
Other versions of this item:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-CTA-2009-07-11 (Contract Theory & Applications)
- NEP-HEA-2009-07-11 (Health Economics)
- NEP-IAS-2009-07-11 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Asheim,G.B. & Emblem,A.W. & Nilssen,T., 2000.
"Health insurance : treatment vs. compensation,"
40/2000, Oslo University, Department of Economics.
- Frech, H. III, 1994. "State-dependent utility and the tort system as insurance: Strict liability versus negligence," International Review of Law and Economics, Elsevier, vol. 14(3), pages 261-271, September.
- Karolin Becker & Peter Zweifel, 2005. "Cost Sharing in Health Insurance: An Instrument for Risk Selection?," SOI - Working Papers 0513, Socioeconomic Institute - University of Zurich.
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