Health Insurance and Preventive Behavior

Volker Meier

Journal of Institutional and Theoretical Economics (JITE), 1999, vol. 155, issue 2, 383-

Abstract: This paper investigates how health insurance parameters influence preventive behavior and studies the structure of optimal health insurances. The first-best allocation with full coverage for the costs of curative care can generally be reached if all prevention is observable by the insurer. If unobserved prevention is not negligible, consumers will usually purchase only partial coverage for the costs of curative care. Observable prevention may be restricted by the insurer in order to encourage unobserved prevention. If the advice of physicians can bias the decision of the insured, the insurer usually recommends a relatively low level of prevention.

JEL-codes: I11 I12 (search for similar items in EconPapers)
Date: 1999
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