Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, to compute the corresponding premiums, and thereby to reduce asymmetric information. Permitting risk classification may reduce informational asymmetry-induced...

This paper studies the design of health insurance with ex post moral hazard, when there is imperfect competition in the market for the medical product. Various scenarios, such as monopoly pricing, price negotiation or horizontal differentiation are considered. The insurance contract specifies...

This paper studies the design of health insurance with ex post moral hazard, when there is imperfect competition in the market for the medical product. Various scenarios, such as monopoly pricing, price negotiation or horizontal differentiation are considered. The insurance contract specifies...

A common misunderstanding of moral hazard emerges from an inaccurate definition of health-care insurance. What we call health insurance is actually a bundle of two services — insurance for catastrophic care and subsidies for routine care. The insurance portion covers insurable medical events...

This paper exploits temporal and spatial variation in the implementation of US sick pay mandates to assess their labor market consequences. We use the Synthetic Control Group Method (SCGM) and the Quarterly Census of Employment and Wages (QCEW) to estimate the causal effect of mandated sick...

Risk adjustment is a common policy for mitigating the effects of adverse selection when government regulation limits insurer ability to rate consumers according to their expected risks. I study the social welfare implications of risk adjustment. I first show theoretically that risk adjustment...

What are the cumulative effects of health shocks over the life-cycle? The answer depends on the nature of persistence of bad health and the extent to which it changes individuals' economic circumstances. We measure the lifetime costs of bad health using a rich structural model that can reproduce...