Moral Hazard in Health Insurance: What We Know and How We Know It
Name
jvy017.pdf
Description
Published version
Size
377.12 KB
Format
Adobe PDF
Checksum (MD5)
42b54c7e30328f873d7503c94e4940c0
Author(s)
Einav, Liran
Finkelstein, Amy
Date Issued
2018
Journal
Journal of the European Economic Association
Publisher
Oxford University Press (OUP)
Version
Final published version
Abstract
© The Author(s) 2018. Published by Oxford University Press on behalf of European Economic Association. We describe research on the impact of health insurance on healthcare spending ("moral hazard"), and use this context to illustrate the value of and important complementarities between different empirical approaches. One common approach is to emphasize a credible research design; we review results from two randomized experiments, as well as some quasi-experimental studies. This work has produced compelling evidence that moral hazard in health insurance exists-that is, individuals, on average, consume less healthcare when they are required to pay more for it out of pocket-as well as qualitative evidence about its nature. These studies alone, however, provide little guidance for forecasting healthcare spending under contracts not directly observed in the data. Therefore, a second and complementary approach is to develop an economic model that can be used out of sample. We note that modeling choices can be consequential: different economic models may fit the reduced form but deliver different counterfactual predictions. An additional role of the more descriptive analyses is therefore to provide guidance regarding model choice.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1093/JEEA/JVY017
