Using the age-based insurance eligibility criterion to estimate moral hazard in medical care consumption | Zendy

Yan Zheng | Zendy; Tomislav Vukina | Zendy

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Using the age-based insurance eligibility criterion to estimate moral hazard in medical care consumption

Author(s) -

Yan Zheng,

Tomislav Vukina

Publication year - 2016

Publication title -

financial theory and practice

Language(s) - English

Resource type - Journals

eISSN - 1846-887X

pISSN - 1845-9757

DOI - 10.3326/fintp.40.3.3

Subject(s) - morale hazard , moral hazard , consumption (sociology) , actuarial science , economics , hazard , demographic economics , sociology , casualty insurance , insurance policy , social science , microeconomics , risk pool , incentive , chemistry , organic chemistry

This paper uses fuzzy regression discontinuity design to estimate the moral hazard effect in health care consumption in the population of young adults. We use invoice data for outpatient hospital services from a regional hospital in Croatia.The estimation is complicated by the fact that the data set consists only of users of medical services, which would tend to underestimate the moral hazard effect. To address this issue we use a modified version of the instrumental variables approach.We find a 92% reduction in the number of hospital visits for individuals who lost insurance coverage when crossing the 18th birthday threshold

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