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Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?

Several regulated health insurance markets include the option for consumers to choose a voluntary deductible. An important motive for this option is to reduce moral hazard. In return for a voluntary deductible, consumers receive a premium rebate, which is typically community rated. Under community r...

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Detalles Bibliográficos
Autores principales: Antonini, M., van Kleef, R. C., Henriquez, J., Paolucci, F.
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Palgrave Macmillan UK 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8562369/
https://www.ncbi.nlm.nih.gov/pubmed/34744394
http://dx.doi.org/10.1057/s41288-021-00253-3
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author Antonini, M.
van Kleef, R. C.
Henriquez, J.
Paolucci, F.
author_facet Antonini, M.
van Kleef, R. C.
Henriquez, J.
Paolucci, F.
author_sort Antonini, M.
collection PubMed
description Several regulated health insurance markets include the option for consumers to choose a voluntary deductible. An important motive for this option is to reduce moral hazard. In return for a voluntary deductible, consumers receive a premium rebate, which is typically community rated. Under community rating, voluntary deductibles are particularly attractive for low-risk consumers. Since these people use relatively little medical care, the total moral hazard reduction might be relatively small compared to the total healthcare spending. This paper examines the potential moral hazard reduction under risk-rated premiums. We use Chile as a case study due to institutional features that make it a valid benchmark for other countries. Our simulations show that in the presence of self-selection and under a uniform percentage moral hazard reduction across risk types, the absolute moral hazard reduction from a voluntary deductible is indeed expected to be larger in a system with risk-rated premiums than in a system with community-rated premiums. Nevertheless, sensitivity checks show that this conclusion might no longer hold as the percentage moral hazard reduction is lower for high-risk individuals compared to low-risk individuals.
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spelling pubmed-85623692021-11-03 Can risk rating increase the ability of voluntary deductibles to reduce moral hazard? Antonini, M. van Kleef, R. C. Henriquez, J. Paolucci, F. Geneva Pap Risk Insur Issues Pract Article Several regulated health insurance markets include the option for consumers to choose a voluntary deductible. An important motive for this option is to reduce moral hazard. In return for a voluntary deductible, consumers receive a premium rebate, which is typically community rated. Under community rating, voluntary deductibles are particularly attractive for low-risk consumers. Since these people use relatively little medical care, the total moral hazard reduction might be relatively small compared to the total healthcare spending. This paper examines the potential moral hazard reduction under risk-rated premiums. We use Chile as a case study due to institutional features that make it a valid benchmark for other countries. Our simulations show that in the presence of self-selection and under a uniform percentage moral hazard reduction across risk types, the absolute moral hazard reduction from a voluntary deductible is indeed expected to be larger in a system with risk-rated premiums than in a system with community-rated premiums. Nevertheless, sensitivity checks show that this conclusion might no longer hold as the percentage moral hazard reduction is lower for high-risk individuals compared to low-risk individuals. Palgrave Macmillan UK 2021-11-02 2023 /pmc/articles/PMC8562369/ /pubmed/34744394 http://dx.doi.org/10.1057/s41288-021-00253-3 Text en © The Geneva Association 2021 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Antonini, M.
van Kleef, R. C.
Henriquez, J.
Paolucci, F.
Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title_full Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title_fullStr Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title_full_unstemmed Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title_short Can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
title_sort can risk rating increase the ability of voluntary deductibles to reduce moral hazard?
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8562369/
https://www.ncbi.nlm.nih.gov/pubmed/34744394
http://dx.doi.org/10.1057/s41288-021-00253-3
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