MORAL HAZARD IN HEALTH INSURANCE: DO DYNAMIC INCENTIVES MATTER?

The Review of Economics and Statistics
Aviva Aron-DineMark R Cullen

Abstract

Using data from employer-provided health insurance and Medicare Part D, we investigate whether healthcare utilization responds to the dynamic incentives created by the nonlinear nature of health insurance contracts. We exploit the fact that, because annual coverage usually resets every January, individuals who join a plan later in the year face the same initial ("spot") price of healthcare but a higher expected end-of-year ("future") price. We find a statistically significant response of initial utilization to the future price, rejecting the null that individuals respond only to the spot price. We discuss implications for analysis of moral hazard in health insurance.

References

Nov 5, 1988·Journal of Health Economics·E B Keeler, J E Rolph
Jan 22, 2002·The Rand Journal of Economics·J H Cardon, I Hendel
Aug 13, 2011·The Quarterly Journal of Economics·Raj ChettyLuigi Pistaferri
Jan 1, 2013·The Journal of Economic Perspectives : a Journal of the American Economic Association·Aviva Aron-DineAmy Finkelstein
Feb 1, 2013·The American Economic Review·Liran EinavMark R Cullen
Jan 16, 2016·The Quarterly Journal of Economics·Liran EinavPaul Schrimpf
Dec 1, 2013·The American Economic Review·Benjamin R Handel

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Citations

Feb 18, 2016·Applied Health Economics and Health Policy·Matthias PelsterFranziska Laporte Uribe
Jan 11, 2016·Health Economics·Cameron M Kaplan, Yuting Zhang
Oct 10, 2015·Health Economics·Stefan Boes, Michael Gerfin
Dec 15, 2015·International Journal of Industrial Organization·Amanda E Kowalski
Aug 6, 2016·Health Economics·Helmut FarbmacherAmelie Wuppermann
Jan 16, 2016·The Quarterly Journal of Economics·Liran EinavPaul Schrimpf
Sep 18, 2018·Journal of the European Economic Association·Liran Einav, Amy Finkelstein
Sep 21, 2018·American Economic Journal. Economic Policy·Liran EinavMaria Polyakova
Aug 14, 2019·The European Journal of Health Economics : HEPAC : Health Economics in Prevention and Care·Stefanie Thönnes
Dec 19, 2020·Ophthalmology. Glaucoma·Nikki MehranNatasha Nayak Kolomeyer
Feb 14, 2021·Journal of Health Economics·Michael ChernewFiona Scott Morton
Mar 16, 2021·Journal of Econometrics·David Powell, Dana Goldman
Dec 18, 2018·Journal of Public Economics·Jason AbaluckAshley Swanson

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