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Moral Hazard And Adverse Selection In Health Insurances, Evidence From A Transitional Economy

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  • MINH THI NGUYEN

    (Mathematical Economics Faculty, National Economic University, 207 Giai Phong, Hanoi, Vietnam)

Abstract

This paper uses special features of Vietnam's health insurance system to separately estimate the effects of moral hazard and adverse selection. Traditionally, the estimation of those effects is ad hoc due to the endogeneity of insurance status. Due to a special fact in Vietnam that there exist a great deal of people who are under the compulsory scheme but get no insurances, we are able to estimate the effects of moral hazard and adverse selection using a matching estimator technique. Our results show that with outpatient services, moral hazard and adverse selection are very severe in Vietnam for old people, and not for young people; and that for inpatient service, the effects are insignificant. The results can be used in the construction of the health insurance policy for Vietnam toward universal insurance as stated in the Law of Health Insurance 2008.

Suggested Citation

  • Minh Thi Nguyen, 2014. "Moral Hazard And Adverse Selection In Health Insurances, Evidence From A Transitional Economy," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(02), pages 1-21.
    • Handle: RePEc:wsi:serxxx:v:59:y:2014:i:02:n:s0217590814500118
    DOI: 10.1142/S0217590814500118
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    References listed on IDEAS

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    1. Wagstaff, Adam, 2005. "The economic consequences of health shocks," Policy Research Working Paper Series 3644, The World Bank.
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    More about this item

    Keywords

    Moral hazard; adverse selection; health insurance; PSM; transitional economy; I13; I18;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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