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A note on health insurance under ex post moral hazard

Pierre Picard

Working Papers from HAL

Abstract: In the linear coinsurance problem, examined Örst by Mossin (1968), a higher risk aversion with respect to wealth in the sense of ArrowPratt implies a higher optimal coinsurance rate. We show that this property does not hold for health insurance under ex post moral hazard, i.e., when illness severity cannot be observed by insurers and policyholders decide on their health expenditures. The optimal coinsurance rate trades o§ a risk sharing e§ect and an incentive e§ect, both related to risk aversion.

Keywords: Health insurance; ex post moral hazard; coinsurance (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea and nep-ias
Date: 2016-08-01
Note: View the original document on HAL open archive server: https://hal-polytechnique.archives-ouvertes.fr/hal-01353597v2
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Journal Article: A Note on Health Insurance under Ex Post Moral Hazard (2016) Downloads
Working Paper: A note on health insurance under ex post moral hazard (2016) Downloads
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