Health insurance and ex ante moral hazard
Subtitle: evidence from Medicare
By: Dhaval Dave, Robert Kaestner.
Contributors: Kaestner, Robert.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 12764.; Working paper series (National Bureau of Economic Research) -- working paper no. 12764.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 58
Subjects: Insurance, Health -- Economic aspects; Health behavior -- Econometric models; Older people -- Health and hygiene -- Attitudes
Description: "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.
Notes: "December 2006"

Includes bibliographical references (p. 36-38).

Also available in PDF from the NBER world wide web site (www.nber.org).