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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 first by Mossin (1968), a higher risk aversion with respect to wealth in the sense of Arrow-Pratt 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 off a risk sharing effect and an incentive effect, both related to risk aversion.

Keywords: Health Insurance; ex post moral hazard; coinsurance (search for similar items in EconPapers)
Date: 2016-10-10
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://polytechnique.hal.science/hal-01385520
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Citations: View citations in EconPapers (3)

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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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