6533b7d0fe1ef96bd125b866
RESEARCH PRODUCT
Health insurance: medical treatment vs. disability payment
Tore NilssenGeir B. AsheimAnne Wenche Emblemsubject
Economics and EconometricsActuarial sciencePublic economicsInsurance policySelf-insuranceEconomicsCasualty insuranceGroup insuranceLiability insuranceGeneral insuranceIncome protection insuranceDisability insurancedescription
We present arguments for treating health insurance and disability insurance in an integrated manner in economic analysis, based on a model where each individual's utility depends on both consumption and health and her income depends on her earning ability. When purchasing insurance, she may choose a contract that offers less than full medical treatment. We find that high-ability individuals demand full recovery and equalize utility across states, while low-ability individuals demand partial treatment and cash compensation and suffer a loss in utility if ill. Our results carry over to the case where health states are not observable. NOTICE: this is the author’s version of a work that was accepted for publication in Research in Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Research in Economics
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2010-09-01 |