Ex-ante moral hazard? Overweight and health insurance expansion in Mexico

Extending health insurance coverage to previously uninsured populations can improve access to preventive services by relaxing financial barriers to health information and care, including those related to weight management. However, in the presence of ex ante moral hazard, insurance coverage may weaken incentives for preventive effort, potentially increasing unhealthy behaviours among already obese individuals. This paper examines these competing mechanisms using evidence from the introduction of universal public insurance, namely Mexico’s Seguro Popular (SP) in the 2000s. We exploit plausibly exogenous variation in the timing of SP rollout across municipalities generated by differential implementation speeds. We find no evidence that the rollout of SP modifyied individuals body mass index (BMI) or their obesity. Further, heterogeneity analysis suggests that SP exposure leads to a significant reduction in BMI and a 2 percentage point decline in smoking prevalence. These results provide no evidence of ex ante moral hazard in weight related health behaviours after the expansion of universal insurance.