health care and have incentives for risk selection. We derive the optimal cost reimbursement function which balances the … reimbursement scheme should reimburse costs only up to a limit. -- health insurance ; risk selection ; risk adjustment …

There are two types of selection models in the health economics literature. One focuses on choice between a fixed set … of contracts. Consumers with greater demand for medical care services prefer contracts with more generous reimbursement … program offers an opportunity to study these models empirically, although unlike the models in the economics literature there …