Health Insurance without Single Crossing: Why Healthy People Have High Coverage
Research output: Contribution to journal › Journal article › Research › peer-review
Standard
Health Insurance without Single Crossing : Why Healthy People Have High Coverage. / Boone, Jan; Schottmüller, Christoph.
In: Economic Journal, Vol. 127, No. 599, 2017, p. 84-105.Research output: Contribution to journal › Journal article › Research › peer-review
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Health Insurance without Single Crossing
T2 - Why Healthy People Have High Coverage
AU - Boone, Jan
AU - Schottmüller, Christoph
PY - 2017
Y1 - 2017
N2 - Standard insurance models predict that people with high risks have high insurance coverage. It is empirically documented that people with high income have lower health risks and are better insured. We show that income differences between risk types lead to a violation of single crossing in an insurance model where people choose treatment intensity. We analyse different market structures and show the following: If insurers have market power, the violation of single crossing caused by income differences and endogenous treatment choice can explain the empirically observed outcome. Our results do not rely on differences in risk aversion between types.
AB - Standard insurance models predict that people with high risks have high insurance coverage. It is empirically documented that people with high income have lower health risks and are better insured. We show that income differences between risk types lead to a violation of single crossing in an insurance model where people choose treatment intensity. We analyse different market structures and show the following: If insurers have market power, the violation of single crossing caused by income differences and endogenous treatment choice can explain the empirically observed outcome. Our results do not rely on differences in risk aversion between types.
KW - Faculty of Social Sciences
KW - health insurance
KW - competition
KW - single crossing
U2 - 10.1111/ecoj.12242
DO - 10.1111/ecoj.12242
M3 - Journal article
VL - 127
SP - 84
EP - 105
JO - The Economic Journal
JF - The Economic Journal
SN - 0013-0133
IS - 599
ER -
ID: 131158876