Health insurance: Medical treatment vs disability payment

Health Insurance: Medical Treatment vs. Disability Payment∗

We present arguments for treating health insurance and disability insurance in an integrated manner in economic analysis, based on a model where each individual’s utility depends on both consumption and health and her income depends on her earnings ability. When purchasing insurance, she may choose a contract that offer less than full medical treatment. We find that high-ability individuals dem...

Disability Insurance and Health Insurance Reform: Evidence from Massachusetts.

As health insurance becomes available outside of the employment relationship as a result of the Affordable Care Act (ACA), the cost of applying for Social Security Disability Insurance (SSDI)—potentially going without health insurance coverage during a waiting period totaling 29 months from disability onset—will decline for many people with employer-sponsored health insurance. At the same time,...

Health Insurance Coverage and the Disability Insurance Application Decision

We investigate the effect of health insurance coverage on the decision of individuals to apply for Disability Insurance (DI). Those who qualify for DI receive public insurance under Medicare, but only after a two-year waiting period. This raises concerns that many disabled are going uninsured while they wait for their Medicare coverage. Moreover, the combination of this waiting period and the u...

A payment method for health insurance purchasing cooperatives.

Risk Selection and Optimal Health Insurance-provider Payment Systems

This article presents a model of the important health-policy dilemmas of risk selection and moral hazard. When providers can increase revenues by selecting favorable risks, capitation or purely prospective payment is unlikely to be optimal. A second best payment system may involve mixed levels of both demandand supply-side cost sharing: consumers may prefer to pay deductibles and co-payments ra...