Adverse selection, moral hazard and the demand for Medigap insurance. Keane, M. & Stavrunova, O. Journal of Econometrics.
Adverse selection, moral hazard and the demand for Medigap insurance [link]Paper  doi  abstract   bibtex   
In this paper we study the adverse selection and moral hazard effects of Medicare supplemental insurance (Medigap). While both have been studied separately, this is the first paper to analyze them in a unified econometric framework. We find that adverse selection into Medigap is weak, but the moral hazard effect is substantial. On average, Medigap coverage increases health care spending by 24%, with especially large effects for relatively healthy individuals. These results have important policy implications. For instance, they imply that conventional remedies for inefficiencies created by adverse selection (e.g., mandatory enrolment) may lead to substantial health care cost increases.
@article{keane_adverse_????,
	title = {Adverse selection, moral hazard and the demand for {Medigap} insurance},
	issn = {0304-4076},
	url = {http://www.sciencedirect.com/science/article/pii/S0304407615002225},
	doi = {10.1016/j.jeconom.2015.08.002},
	abstract = {In this paper we study the adverse selection and moral hazard effects of Medicare supplemental insurance (Medigap). While both have been studied separately, this is the first paper to analyze them in a unified econometric framework. We find that adverse selection into Medigap is weak, but the moral hazard effect is substantial. On average, Medigap coverage increases health care spending by 24\%, with especially large effects for relatively healthy individuals. These results have important policy implications. For instance, they imply that conventional remedies for inefficiencies created by adverse selection (e.g., mandatory enrolment) may lead to substantial health care cost increases.},
	urldate = {2015-10-05},
	journal = {Journal of Econometrics},
	author = {Keane, Michael and Stavrunova, Olena},
	keywords = {Adverse selection, Bayesian analysis, Data fusion, Gibbs, Health expenditures, Health insurance, Markov-chain Monte Carlo, Medicare, Medigap, Metropolis, Missing data, Moral hazard, Simultaneous equation model},
	file = {ScienceDirect Full Text PDF:files/52471/Keane and Stavrunova - Adverse selection, moral hazard and the demand for.pdf:application/pdf;ScienceDirect Snapshot:files/52472/S0304407615002225.html:text/html}
}
Downloads: 0