Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163555
Authors: 
Fels, Markus Peter
Year of Publication: 
2017
Series/Report no.: 
Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT) 105
Abstract: 
Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations - consumer mistakes and limited access - to assess the welfare implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel inefficiencies by limiting access. An alternative design, relying on bonuses, has no such side effects and achieves the same incentivization.
Subjects: 
Moral Hazard
Limited Access
Cost-Sharing
Insurance Rebates
JEL: 
D82
I13
I14
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.