Adverse Selection in Health Insurance in Nigeria (original) (raw)
Related papers
Management Science and Engineering, 2009
Due to special properties of moral hazard and adverse selection in health insurance contract, governments' effort to efficiently provide health care services to their citizens tends to encounter many problems, especially in low income countries. The National Health Insurance of Ghana has not been immune to this problem. This paper, explores empirical research to test for the asymmetric information problem of moral hazard and adverse selection in health insurance contracts. It uses both quantitative and qualitative to analyze data gathered through a meaningfully administered questionnaire in the Sekyere West District of Ghana to make its conclusion on the subject matter.
WELFARE EFFECTS OF HEALTH INSURANCE IN NIGERIA
THE NIGERIAN JOURNAL OF ECONOMIC AND SOCIAL STUDIES, 2019
The lower cost of health care services made possible by health insurance may lead to moral hazard. Moral hazard creates inefficiency in the health insurance market and loss in welfare. This paper investigates moral hazard and welfare effects of health insurance in Nigeria. A health care utilization model was estimated for moral hazard in the demand for health care using a generalized method of moments. Marshallian, Hicksian and Nyman's estimates were used to determine the welfare effects of health insurance. Moral hazard in health insurance was evident in the value of price elasticity of demand for medical care consumption in health insurance, social and private health insurance with coefficients of 0.16, 0.14 and 0.0001 respectively. There were welfare gains (efficient moral hazard) from the Marshallian (85.8%), Hicksian (87.5%) and Nyman's (87.3%) estimates against welfare loss (inefficient moral hazard) of-14.2%,-12.5% and-12.7%. Health insurance increased overall welfare in spite of the moral hazard. Therefore, the government should, through appropriate policies, encourage the expansion of health insurance in Nigeria.
Adverse selection and moral hazard in health insurance
In this paper, we want to characterize the optimal health insurance contract with adverse selection and moral hazard. We assume that policyholders di¤er by the permanent health status loss and choose an unobservable preventive e¤ort in order to reduce the probability of illness which is ex-ante identical. The di¤erence in illness'after-e¤ect modi…es policyholders' preventive actions. By the way, they di¤er in probabilities of illness leading to a situation close to Rothschild and Stiglitz 'model. In this case, we show that the optimal contract exhibits a deductible for the high health risk type since a higher after e¤ect implies a higher preventive e¤ort and then a lower probability of illness rather than for the low health risk type.
This study assesses socio-demographic variables on the demand for health insurance in Lagos State. For this purpose, the researchers have been able to examine selected socioeconomic and demographic variables and their effects on health insurance accessibility and desire of individual households. The explanatory research design was employed. A convenience sampling technique was adopted. Data was gathered from individual households within Alimosho and Ojo Local Government Areas of Lagos State through the use of an interviewed schedule. The sample consisted of 212 respondents made up of individual households within the sample areas. Data collected was analyzed using multiple regression technique. The study was able to establish some level of contributory linkage between selected socio-demographic variables and demand for health insurance. The findings show that while education and income both appeared to have significant effect, gender and age both have positive contributory effect. The study therefore recommends that health insurance providers should endeavor to education the larger society of the significance of health insurance products to human existence. Secondly, a robust strategic health insurance outlines should be designed to incorporate the vulnerable ones in the society to ensure equality and fairness in the provision of National Health Insurance Scheme. Lastly, Health Maintenance Organizations should endeavor to implement flexible payment plans for participants in order to improve participation of more individuals.
The distortionary effect of health insurance on health demand
2007
This paper presents a general framework for modeling the impact of insurance on healthcare demand extending some of the results of the two-risk model of Rothschild and Stiglitz (1976), but including the latter as a special case. Rothschild and Stiglitz's approach assumes equivalence between the price of treatment and the discomfort caused by the disease. Relaxing this assumption turns out to be key in understanding participation in the insurance and healthcare markets. The demands for insurance and healthcare are modeled simultaneously, under symmetric and asymmetric information. Four main results arise from the relaxation of this assumption. First, only the presence of an insurance market can produce healthcare consumption at higher prices than the discomfort. Second, adverse selection may lead healthcare to be sold at a price lower than that under perfect information. Third, the potential non-participation of one type risk arises despite competition, depending on the degree o...
Selection on Moral Hazard in Health Insurance
2011
numerous seminar participants for helpful comments and suggestions. The data were provided as part of an ongoing service and research agreement between Alcoa, Inc. and Stanford, under which Stanford faculty, in collaboration with faculty and staff at Yale University, perform jointly agreed-upon ongoing and ad hoc research projects on workers' health, injury, disability, and health care, and Mark Cullen serves as Senior Medical Advisor for Alcoa, Inc.
Journal of international business and economics, 2016
This study applies a probit model to secondary data to investigate the factor influencing demands for health insurance in Uganda. The results reveal that wealth, level of education, access to information and area of residence are significantly associated with demand for health insurance. However, age, marital status and health status as proxied by smoking are insignificant. Results further reveal that health insurance is more pronounced among wealthier, educated and well-informed individuals who reside in urban areas. The study therefore recommends for the policies geared towards poverty reduction, investing in education both at primary and secondary levels, increased public awareness about benefits of health insurance and establishment of a National Social Health insurance scheme since such variables were highly associated with demand for health insurance.
Demand for Health Insurance in Ghana: What Factors Influence Enrollment?
American Journal of Public Health Research, 2014
In 2003, there was a paradigm shift in Ghana's quest for a more humane, affordable and reliable mechanism of financing healthcare with the introduction of the national health insurance scheme. The scheme was to replace the hitherto obnoxious Cash and Carry System of paying for health care at the point of service, and to provide a better and much more humane financial arrangement that will enable the citizens to access health care service without having to pay at the point of service delivery and also ensure an improvement in the quality of basic health. This study employed descriptive statistics-Logit and Probit Models to investigate the factors that influence Ghanaians to enroll with the scheme. The results from the logit and probit models indicate that sex, marital status and cost of curative care were strong factors in influencing one's decision to join the scheme. Again the marginal effects and odd ratios gave a further indication that factors such as individuals' income, higher levels of education and poor ill health among others also influence Ghanaians to join the scheme. This research is of the view that any public education aimed at increasing enrollment should be guided by these factors.
Testing for adverse selection into private medical insurance
2006
We develop a test for adverse selection and use it to examine private health insurance markets. In contrast to earlier papers that consider a purely private system or a system in which private insurance supplements a public system, we focus our attention on a system where privately funded health care is substitutive of the publicly funded one. Using a model of competition among insurers, we generate predictions about the correlation between risk and the probability of taking private insurance under both symmetric information and adverse selection. These predictions constitute the basis for our adverse selection test. The theoretical model is also useful to conclude that the setting that we focus on is especially attractive to test for adverse selection. Using the British Household Panel Survey, we find evidence that adverse selection is present in this market.