Time Aggregation in Health Insurance Deductibles /
Hong, Long.
Time Aggregation in Health Insurance Deductibles / Long Hong, Corina Mommaerts. - Cambridge, Mass. National Bureau of Economic Research 2021. - 1 online resource: illustrations (black and white); - NBER working paper series no. w28430 . - Working Paper Series (National Bureau of Economic Research) no. w28430. .
February 2021.
Health insurance plans increasingly pay for expenses only beyond a large annual deductible. This paper explores the implications of deductibles that reset over shorter timespans. We develop a model of insurance demand between two actuarially equivalent deductible policies, in which one deductible is larger and resets annually and the other deductible is smaller and resets biannually. Our model incorporates borrowing constraints, moral hazard, mid-year contract switching, and delayable care. Calibrations using claims data show that the liquidity benefits of resetting deductibles can generate welfare gains of 6-10% of premium costs, particularly for individuals with borrowing constraints.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Time Aggregation in Health Insurance Deductibles / Long Hong, Corina Mommaerts. - Cambridge, Mass. National Bureau of Economic Research 2021. - 1 online resource: illustrations (black and white); - NBER working paper series no. w28430 . - Working Paper Series (National Bureau of Economic Research) no. w28430. .
February 2021.
Health insurance plans increasingly pay for expenses only beyond a large annual deductible. This paper explores the implications of deductibles that reset over shorter timespans. We develop a model of insurance demand between two actuarially equivalent deductible policies, in which one deductible is larger and resets annually and the other deductible is smaller and resets biannually. Our model incorporates borrowing constraints, moral hazard, mid-year contract switching, and delayable care. Calibrations using claims data show that the liquidity benefits of resetting deductibles can generate welfare gains of 6-10% of premium costs, particularly for individuals with borrowing constraints.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.