MORAL HAZARD AND ADVERSE SELECTION IN HEALTH INSURANCES, EVIDENCE FROM A TRANSITIONAL ECONOMY

Minh Thi Nguyen ()
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Minh Thi Nguyen: Mathematical Economics Faculty, National Economic University, 207 Giai Phong, Hanoi, Vietnam
Authors registered in the RePEc Author Service: Nguyễn Thị Minh

The Singapore Economic Review (SER), 2014, vol. 59, issue 02, 1-21

Abstract: This paper uses special features of Vietnam's health insurance system to separately estimate the effects of moral hazard and adverse selection. Traditionally, the estimation of those effects is ad hoc due to the endogeneity of insurance status. Due to a special fact in Vietnam that there exist a great deal of people who are under the compulsory scheme but get no insurances, we are able to estimate the effects of moral hazard and adverse selection using a matching estimator technique. Our results show that with outpatient services, moral hazard and adverse selection are very severe in Vietnam for old people, and not for young people; and that for inpatient service, the effects are insignificant. The results can be used in the construction of the health insurance policy for Vietnam toward universal insurance as stated in the Law of Health Insurance 2008.

Keywords: Moral hazard; adverse selection; health insurance; PSM; transitional economy; I13; I18 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1142/S0217590814500118

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