Health Insurance: Treatment vs. Compensation

Geir Asheim, Tore Nilssen () and Anne Wenche Emblem ()
Additional contact information
Anne Wenche Emblem: Agder University, Postal: Norway

No 2001:1, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: In this paper, we view health insurance as a combined hedge against the two consequences of falling ill: treatment expenditures and loss in income. We discuss how an individual’s ability when healthy affects her decision on whether to buy health insurance with treatment to full recovery if ill or with partial treatment combined with cash compensation for the resulting loss in income. We find that a highability individual demands full recovery and is fully insured, while a low-ability individual demands partial treatment and cash compensation and is only partly insured.

Keywords: Health Insurance; Treatment; Compensation (search for similar items in EconPapers)
JEL-codes: D81 G22 I11 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2009-06-30
New Economics Papers: this item is included in nep-hea and nep-ias
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Related works:
Working Paper: Health insurance: treatment vs. compensation (2000)
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