Basic versus supplementary health insurance: moral hazard and adverse selection

Jan Boone

No 10199, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper introduces a tractable model of health insurance with both moral hazard and adverse selection. We show that government sponsored universal basic insurance should cover treatments with the biggest adverse selection problems. Treatments not covered by basic insurance can be covered on the private supplementary insurance market. Surprisingly, the cost effectiveness of a treatment does not affect its priority to be covered by basic insurance.

Keywords: Adverse selection; Cost effectiveness; Moral hazard; Public vs private insurance; Universal basic health insurance; Voluntary supplementary insurance (search for similar items in EconPapers)
JEL-codes: D82 H51 I13 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-cta, nep-hea and nep-ias
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Basic versus supplementary health insurance: Moral hazard and adverse selection (2015)
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