Moral hazard and selection for voluntary deductibles

Abstract

This paper investigates whether the voluntary deductible in the Dutch health insurance system reduces moral hazard or acts only as a cost reduction tool for low‐risk individuals. We use a sample of 14,089 observations, comprising 2,939 individuals over seven waves from the Longitudinal Internet Studies for the Social sciences panel for the analysis. We employ bivariate models that jointly model the choice of a deductible and health care utilization and supplement the identification with an instrumental variable strategy. The results show that the voluntary deductible reduces moral hazard, especially in the decision to visit a doctor (extensive margin) compared with the number of visits (intensive margin). In addition, a robustness test shows that selection on moral hazard is not present in this context.

A systematic review of strategies used for controlling consumer moral hazard in health systems

“…The studies included in this theme investigated consequences such as the utilization of health services, health costs, health related behavior, the choice of insurance plan, and the opinion and acceptance of consumers using quantitative, qualitative, review, and theoretical approaches (model-based), the results of quantitative studies are reported in narrative form as follows: modest to high reduction in health services and medications utilization [ 9 , 20 , 21 , 23 , 33 , 38 , 44 , 45 , 47 , 49 , 51 , 55 , 56 , 64 , 69 , 71 ], reduction in health cost [ 21 , 39 , 41 , 42 , 44 , 53 , 65 , 68 ], low or no significant effect on health services utilization [ 6 , 34 , 35 , 40 , 62 , 63 , 65 ], low or no significant effect on health costs [ 5 ], increasing cost contaminate incentive (CCI) [ 57 ], significant correlation with higher preventive behavior [ 13 , 50 ] modest efficiency gain [ 18 ], increasing medication adherence [ 48 ], increasing demand for low price drug [ 61 ], optimal insurance [ 54 ].…”

“…The outcomes analyzed in the included studies are other points of debate in this review. The majority of the outcomes analyzed included demand and utilization of health services [ 5 , 15 , 18 – 24 , 30 , 33 , 37 – 40 , 43 – 45 , 47 – 51 , 55 , 56 , 58 , 60 , 62 – 65 , 68 – 71 , 75 , 84 , 86 ] and health services costs and expenditures, optimality and efficiency of strategies [ 5 , 15 , 30 – 32 , 36 , 37 , 39 , 41 – 44 , 53 , 54 , 57 , 59 , 68 , 70 , 73 – 76 , 83 , 85 , 87 , 94 ]. Limited studies have addressed other important aspects such as access to low-income people [ 49 , 60 , 68 ], reduction in the consumption of both essential (such as preventive and diagnostic services) and non-essential services [ 24 , 44 , 58 ], and people’s attitudes and acceptance [ 25 , 34 , 52 , 67 ].…”

The Impact of Introducing Co-insurance into an Insurance Policy on Moral Hazard: An Incentivised Experiment

“…In turn, by researching the health insurance market, Alessie et al (2019) showed that voluntary deductible reduces moral hazard in the Netherlands, especially in the decision to have any doctor's visits (extensive margin) as compared to the number of visits (intensive margin). Kremslehner and Muermann (2016) attempted to determine the occurrence of ex ante moral hazard and adverse selection by analysing telematics data on drivers.…”

Choice in Insurance Markets: A Pigouvian Approach to Social Insurance Design

“…j One notable exception is Landais et al (2020). k A small but growing literature looks at selection on moral hazard in the market for health insurance (Einav et al 2013;Shepard 2016;Péron and Dormont 2018;Alessie et al 2020). l Some evidence on choice frictions in Landais and Spinnewijn (forthcoming) and on biased beliefs in Spinnewijn (2015) and Mueller et al (2020).…”