RT Monograph SR 00 A1 Cremer, Helmuth A1 Lozachmeur, Jean-Marie T1 Nonlinear reimbursement rules for preventive and curative medical care YR 2024 FD 2024-04 VO 24-1527 SP 28 K1 ex post moral hazard K1 health insurance K1 secondary prevention AB We study the design of nonlinear reimbursement rules for expenses on secondary preventive and on therapeutic care. With some probability individuals are healthy and do not need any therapeutic health care. Otherwise they become ill and their health status (the severity of their disease) is realized and identifies their ex post type. Preventive care is determined ex ante, that is before the health status is determined while curative care is chosen ex post. Insurance benefits depend on preventive and curative care in a possibly nonlinear way, and marginal benefits can be positive or negative. In the first best, achieved when health status is ex post publicly observable, insurance benefits are fiat (lump sum payments) and do not depend on expenditures. When the severity of the disease is not observable, so that there is ex post moral hazard, this solution is not incentive compatible (for more healthy individuals). The optimal insurance then implies benefits that increase with both types of care. This is because health expenditures reduce informational rents and they are upward distorted. This relaxes the incentive constraint because less healthy individuals value care more than healthy individuals. Even though preventive care is chosen ex ante, when there is no asymmetry of in- formation, it does have an impact on the incentive constraint and thus on informational rents. This is due to two concurring effects. First, prevention is more effective for the more severely ill. Second, these individuals also have a lower marginal utility of income so that a given level of expenditure on preventive care has less impact on their utility. T2 TSE Working Paper PB TSE Working Paper PP Toulouse AV Published LK https://publications.ut-capitole.fr/id/eprint/49336/ UL http://tse-fr.eu/pub/129305