Economics Seminar（2013-23）

Topic: Optimal Health Insurance for Multiple Goods and Time Periods

Speaker:Shenyi Jiang (//hanqing.ruc.edu.cn/faculty/syijiang.htm)

Affiliation: Renmin University

Time:Tuesday, 5 Nov, 14:00-15:30pm

Location:Room217, Guanghua Building 2

Abstract：

This paper reexamines the efficiency-based arguments for second-best optimal health insurance while considering multiple treatment goods and multiple time periods. We show how correlated shocks across health care goods and time should affect optimal insurance plans: complementarity and substitutability of multiple goods and correlated demand shocks interact to affect the optimal cost sharing: substitutes and positively correlated demand shocks across health care goods reduce optimal patient cost sharing. Correlation over time will decrease coinsurance if positive or increase it if negative. Positively correlated uncompensated losses also reduce optimal cost sharing on covered health services. Our results provide a rationale for covering pharmaceuticals and outpatient spending more fully than is implied by static, one health care good or one period models.

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