Deductibles in Health Insurances: Pay or Pain?
We study a health-insurance market where individuals are o.ered 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 su.ciently 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.
|Date of creation:||17 Jun 2003|
|Date of revision:|
|Publication status:||Published in International Journal of Health Care Finance and Economics, 2003, pages 253-266.|
|Contact details of provider:|| Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway|
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- 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.
- Asheim,G.B. & Emblem,A.W. & Nilssen,T., 2000.
"Health insurance : treatment vs. compensation,"
40/2000, Oslo University, Department of Economics.
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