On the Design of Optimal Health Insurance Contracts under Ex Post Moral Hazard
Pierre Martinon (),
Pierre Picard and
Additional contact information
Pierre Martinon: Commands - Control, Optimization, Models, Methods and Applications for Nonlinear Dynamical Systems - CMAP - Centre de Mathématiques Appliquées - Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique - Inria Saclay - Ile de France - Inria - Institut National de Recherche en Informatique et en Automatique - UMA - Unité de Mathématiques Appliquées - Univ. Paris-Saclay, ENSTA ParisTech - École Nationale Supérieure de Techniques Avancées
Post-Print from HAL
We analyze the design of optimal medical insurance under ex post moral haz- ard, i.e., when illness severity cannot be observed by insurers and policyholders decide for themselves on their health expenditures. The trade-o¤ between ex ante risk sharing and ex post incentive compatibility is analyzed in an optimal revelation mechanism under hidden information and risk aversion. The optimal contract provides partial insurance at the margin, with a deductible when in- surers' rates are affected by a positive loading, and it may also include an upper limit on coverage. The potential to audit the health state leads to an upper limit on out-of-pocket expenses.
Keywords: optimal control; health insurance; ex post moral hazard; audit; background risk (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea, nep-ias and nep-mic
Note: View the original document on HAL open archive server: https://hal-polytechnique.archives-ouvertes.fr/hal-01348551v3
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Published in Geneva Risk and Insurance Review, Palgrave Macmillan, 2018, 43 (2), pp.137-185. 〈10.1057/s10713-018-0034-y〉
Downloads: (external link)
Journal Article: On the design of optimal health insurance contracts under ex post moral hazard (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01348551
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().