Ex-Ante Moral Hazard? Overweight and Health Insurance Expansion in Mexico

Extending health insurance to previously uncovered populations can improve access to preventative health care alongside income effects resulting from lower need of out-of-pocket. However, theoretically, in the presence of ex-ante moral hazard, it can also give a disincentive to preventative efforts to lose weight among the already obese population. This paper draws on evidence from the introduction of the Mexican Seguro Popular (SP) in the 2000s to examine its effects on individuals' obesity and body mass index (BMI). We exploit the arbitrary timing of SP’s rollout across Mexican municipalities, namely the exogenous variation resulting from the different speeds in the implementation of SP. We document no significant average effects of SP rollout on BMI and obesity. We document a reduction in the average BMI among those individuals who were already overweight at the time of the introduction of SP and a reduction of 2 pp in the probability of smoking. This evidence suggests no evidence of ex-ante moral hazard in Mexico.