Coinsurance vs. copayments: reimbursement rules for a monopolistic medical product with competitive health insurers

Helmuth Cremer and Jean-Marie Lozachmeur ()
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Jean-Marie Lozachmeur: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper studies a market for a medical product in which there is perfect competition among health insurers, while the good is sold by a monopolist. Individuals di¤er in their severity of illness and there is ex post moral hazard. We consider two regimes : one in which insurers use coinsurance rates (ad valorem reimbursements) and one in which insurers use copayments (specic reimbursements). We show that the induced equilibrium with copayments involves a lower producer price and a higher level of wel- fare for consumers. This results provides strong support for a reference price based reimbursement policy.

Keywords: Ex post moral hazard; Health insurance competition; Copayments; Imperfect competition (search for similar items in EconPapers)
Date: 2022-04-04
New Economics Papers: this item is included in nep-com and nep-ias
Note: View the original document on HAL open archive server: https://hal.science/hal-03629480v1
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Coinsurance vs. co-payments: Reimbursement rules for a monopolistic medical product with competitive health insurers (2022)
Working Paper: Coinsurance vs. Copayments: Reimbursement Rules for a Monopolistic Medical Product with Competitive Health Insurers (2021)
Working Paper: Coinsurance vs. copayments: reimbursement rules for a monopolistic medical product with competitive health insurers (2021)
Working Paper: Coinsurance vs. copayments: reimbursement rules for a monopolistic medical product with competitive health insurers (2021)
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