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Health insurance and ex ante moral hazard : evidence from medicare

Author: Dhaval Dave; Kaestner Robert; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©2006.
Series: Working paper series (National Bureau of Economic Research : Online), working paper no. 12764.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
"Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide evidence to support this prediction. However, in other insurance contexts that involve adverse health events, evidence of ex ante moral hazard is more consistent. In this paper, we extend the analysis of the effect of health insurance on health behaviors by allowing  Read more...
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Additional Physical Format: Print version:
Dave, Dhaval.
Health insurance and ex ante moral hazard.
Cambridge, MA : National Bureau of Economic Research, ©2006
(DLC) 2006619680
Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Dhaval Dave; Kaestner Robert; National Bureau of Economic Research.
OCLC Number: 225994693
Notes: Title from PDF file as viewed on 12/22/2006.
Description: 1 online resource.
Series Title: Working paper series (National Bureau of Economic Research : Online), working paper no. 12764.
Responsibility: Dhaval Dave, Robert Kaestner.

Abstract:

"Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide evidence to support this prediction. However, in other insurance contexts that involve adverse health events, evidence of ex ante moral hazard is more consistent. In this paper, we extend the analysis of the effect of health insurance on health behaviors by allowing for the possibility that health insurance has a direct (ex ante moral hazard) and indirect effect on health behaviors. The indirect effect works through changes in health promotion information and the probability of illness that may be a byproduct of insurance-induced greater contact with medical professionals. We identify these two effects and in doing so identify the pure ex ante moral hazard effect. This study exploits the plausibly exogenous variation in health insurance as a result of obtaining Medicare coverage at age 65. We find limited evidence that obtaining health insurance reduces prevention and increases unhealthy behaviors among elderly persons. There is more robust evidence that physician counseling is successful in changing health behaviors"--National Bureau of Economic Research web site.

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