Search results for "Asymmetric In- formation"

The Effect Of Supplemental Insurance On Health Care Demand With Multiple Information: A Latent Class Analysis

2009

The Medicare program, which provides insurance coverage to the elderly in the United States, does not protect them fully against high out-of-pocket costs. For this reason private supplementary insurance, named Medigap, has been available to cover Medicare gaps. This paper studies how Medigap affects the utilization of health care services. The decision to take out supplemental insurance is likely to be infuenced by unobservable attributes such as actual risk type and insurance preferences. Empirical appraisals to this problem typically rely on the recursive bivariate probit. We exploit the Health and Retirement Study data and some recent advances on latent class analysis to jointly model th…