Accession Number : ADA257499


Title :   Health Insurance: The Trade-Off Between Risk Pooling and Moral Hazard.


Descriptive Note : Monograph


Corporate Author : RAND CORP SANTA MONICA CA


Personal Author(s) : Manning, Willard G ; Marquis, M S


Full Text : https://apps.dtic.mil/dtic/tr/fulltext/u2/a257499.pdf


Report Date : Dec 1989


Pagination or Media Count : 67


Abstract : Choosing economically optimal health insurance coverage involves a trade-off between risk reduction and the overuse of health care. The economic purpose of insurance is to reduce financial uncertainty or risk - the more health insurance lowers the risk, the greater will be the increase in social well-being. But increases in health insurance also increase the amount of medical care demand, because insurance lowers the out-of-pocket cost of health care - the larger the demand response of medical care to cost sharing, the greater the decrease in social well-being, due to the purchase of too much health care. This study examines this trade-off empirically by estimating both the demand for health insurance and the demand for health services. It relies on data from a randomized controlled trial of the cost sharing's effects on the use of health services and on the health status for a general, nonelderly (under age 65) population.


Descriptors :   *HEALTH , *INSURANCE , EXPERIMENTAL DATA , RISK , TRADE OFF ANALYSIS , FINANCIAL MANAGEMENT , HAZARDS


Subject Categories : Economics and Cost Analysis
      Medicine and Medical Research


Distribution Statement : APPROVED FOR PUBLIC RELEASE