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On Discrimination in Health Insurance

Author

Listed:
  • Thomas Boyer-Kassem

    (Tilburg University)

  • Sébastien Duchêne

    (Université Côte d'Azur, France
    GREDEG CNRS)

  • Bart Engelen

    (Tilburg University)

Abstract

In many countries, private health insurance companies are allowed to vary their premiums, or to reject applicants, based on some information on individuals. This practice is intuitively justified by the idea that people should pay the premium corresponding to their own known risk. However, one may consider this as a form of discrimination or wrongful differential treatment. Our goal in this paper is to assess whether profiling is ethically permissible in health insurance. We go beyond the existing literature in considering any possible parameter in profiling, be it genetic, non-genetic, or even non-medical (such as age or place of living). Analyzing several ethical concerns, and tackling the difficult question of responsibility, we argue that profiling is unjust in health insurance on any parameter.

Suggested Citation

  • Thomas Boyer-Kassem & Sébastien Duchêne & Bart Engelen, 2017. "On Discrimination in Health Insurance," GREDEG Working Papers 2017-23, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis, revised Dec 2017.
  • Handle: RePEc:gre:wpaper:2017-23
    as

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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2017-23.pdf
    File Function: Revised version, 2017-12
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    References listed on IDEAS

    as
    1. Amy Finkelstein & Erzo F. P. Luttmer & Matthew J. Notowidigdo, 2009. "Approaches to Estimating the Health State Dependence of the Utility Function," American Economic Review, American Economic Association, vol. 99(2), pages 116-121, May.
    2. Mohammed Abdellaoui & Han Bleichrodt & Olivier L’Haridon, 2008. "A tractable method to measure utility and loss aversion under prospect theory," Journal of Risk and Uncertainty, Springer, vol. 36(3), pages 245-266, June.
    3. Mohammed Abdellaoui & Han Bleichrodt & Corina Paraschiv, 2007. "Loss Aversion Under Prospect Theory: A Parameter-Free Measurement," Management Science, INFORMS, vol. 53(10), pages 1659-1674, October.
    4. Mohammed Abdellaoui & Han Bleichrodt & Hilda Kammoun, 2013. "Do financial professionals behave according to prospect theory? An experimental study," Theory and Decision, Springer, vol. 74(3), pages 411-429, March.
    5. Ingrid Robeyns, 2005. "The Capability Approach: a theoretical survey," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 6(1), pages 93-117.
    6. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    7. repec:eee:ehbiol:v:26:y:2017:i:c:p:164-173 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Discrimination; Health Economics; Insurance; Profiling; Ethics; Social Choice; Welfare;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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