Timing Moral Hazard under Deductibles in Health Insurance
Zabrodina, V.;
Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York
Abstract:
This paper develops a new approach to identifying timing moral hazard in health insurance contracts when deductible choice is endogenous. I set up a dynamic model of healthcare consumption where individuals exceed a high deductible after a large health shock. I show that individuals either strategically prepone care from the year after the shock and keep a high deductible, or do not retime and switch to a low deductible the year after. The identification of timing moral hazard exploits the randomness of shock timing within a calendar year. Empirical results show quantitatively large timing moral hazard responses, which decrease with the time left to the deductible reset. The insured do re-optimize on-the-go to minimize out-of-pocket costs, but face substantial frictions in retiming, which differ across types of care. These patterns bear implications for cost sharing and insurance policy.
Keywords: health insurance; strategic timing; moral hazard; insurance plan choice (search for similar items in EconPapers)
JEL-codes: D82 I11 I13 (search for similar items in EconPapers)
Date: 2022-08
New Economics Papers: this item is included in nep-cta and nep-hea
References: Add references at CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://www.york.ac.uk/media/economics/documents/h ... papers/2022/2223.pdf Main text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found
Related works:
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:yor:hectdg:22/23
Access Statistics for this paper
More papers in Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York HEDG/HERC, Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom. Contact information at EDIRC.
Bibliographic data for series maintained by Jane Rawlings ().