Health Insurance, Health Savings Accounts and Healthcare Utilization

Peter, Richard; Soika, Sebastian und Steinorth, Petra (2016): Health Insurance, Health Savings Accounts and Healthcare Utilization. In: Health Economics, Vol. 25, No. 3: pp. 357-371

Abstract

Assuming symmetric information, we show that a high-deductible health plan (HDHP) combined with a tax-favored health savings account (HSA) induces more savings and less treatment compared with a full coverage plan under reasonable risk preferences. Furthermore, a higher tax subsidy increases savings in any case but decreases medical utilization if and only if treatment expenses are above the deductible. A larger deductible increases savings but does not necessarily decrease healthcare utilization. Whether an HDHP/HSA combination is preferred over a full coverage contract depends on absolute risk aversion. A higher tax advantage increases the attractiveness of an HDHP/HSA combination, whereas the effects of changes in the deductible are ambiguous. The paper shows that a potential regulator needs to carefully set the size of the deductible as only in a certain corridor of the probability of sickness, its effect on aggregate healthcare costs are unambiguously favorable.

• Item Type: Journal article
• Faculties: Munich School of Management > Institute for Risk Management and Insurance
• Subjects: 300 Social sciences > 330 Economics
• ISSN: 1057-9230
• Language: English