Health insurance: the tradeoff between risk pooling and moral hazard

J Health Econ. 1996 Oct;15(5):609-39. doi: 10.1016/s0167-6296(96)00497-3.


Choosing optimal health insurance coverage involves a trade-off between the gain from risk reduction and the deadweight loss from moral hazard. This paper examines this trade-off empirically by estimating both the demand for health insurance and the demand for health services. It relies on data from a randomized controlled trial of cost-sharing's effects on the use of health services and on the health status for a general, non-elderly population.

Publication types

  • Clinical Trial
  • Randomized Controlled Trial
  • Research Support, U.S. Gov't, P.H.S.

MeSH terms

  • Actuarial Analysis
  • Attitude to Health*
  • Cost Sharing / statistics & numerical data*
  • Deductibles and Coinsurance
  • Health Services Needs and Demand / economics
  • Health Services Needs and Demand / statistics & numerical data*
  • Health Services Research / methods
  • Health Status
  • Humans
  • Insurance Pools*
  • Insurance, Health / statistics & numerical data*
  • Models, Econometric
  • Risk
  • United States