EconPapers    
Economics at your fingertips  
 

Selection on Moral Hazard in Health Insurance

Liran Einav, Amy Finkelstein, Stephen Ryan (), Paul Schrimpf and Mark R. Cullen

No 16969, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on moral hazard" can have important implications for attempts to combat either selection or moral hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous moral hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and moral hazard. For example, one implication of our estimates is that abstracting from selection on moral hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.

JEL-codes: D12 D82 G22 (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-cta, nep-hea and nep-ias
Note: AG HC HE IO LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Published as Liran Einav & Amy Finkelstein & Stephen P. Ryan & Paul Schrimpf & Mark R. Cullen, 2013. "Selection on Moral Hazard in Health Insurance," American Economic Review, American Economic Association, vol. 103(1), pages 178-219, February.

Downloads: (external link)
http://www.nber.org/papers/w16969.pdf (application/pdf)

Related works:
Journal Article: Selection on Moral Hazard in Health Insurance (2013) Downloads
Working Paper: Selection on Moral Hazard in Health Insurance (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:16969

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w16969

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-02-23
Handle: RePEc:nbr:nberwo:16969