eprintid: 49336 rev_number: 12 eprint_status: archive userid: 1482 importid: 105 dir: disk0/00/04/93/36 datestamp: 2024-05-31 09:09:43 lastmod: 2024-10-22 14:23:29 status_changed: 2024-10-22 14:23:29 type: monograph metadata_visibility: show creators_name: Cremer, Helmuth creators_name: Lozachmeur, Jean-Marie creators_id: Helmut.Cremer@ut-capitole.fr creators_id: Jean-Marie.Lozachmeur@ut-capitole.fr creators_idrefppn: 058485376 creators_idrefppn: 179825933 creators_affiliation: Toulouse School of Economics; University of Toulouse Capitole, France creators_affiliation: Toulouse School of Economics; CNRS creators_halaffid: 1002422 creators_halaffid: 1002422;441569 title: Nonlinear reimbursement rules for preventive and curative medical care ispublished: pub subjects: subjects_ECO abstract: 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. date: 2024-04 date_type: published publisher: TSE Working Paper official_url: http://tse-fr.eu/pub/129305 faculty: tse divisions: tse keywords: ex post moral hazard keywords: health insurance keywords: secondary prevention language: en has_fulltext: TRUE subjectsJEL: JEL_I11 subjectsJEL: JEL_I18 view_date_year: 2024 full_text_status: public monograph_type: working_paper series: TSE Working Paper volume: 24-1527 place_of_pub: Toulouse pages: 28 institution: Université Toulouse Capitole department: Toulouse School of Economics book_title: TSE Working Paper oai_identifier: oai:tse-fr.eu:129305 harvester_local_overwrite: department harvester_local_overwrite: pending harvester_local_overwrite: subjectsJEL harvester_local_overwrite: creators_idrefppn harvester_local_overwrite: creators_halaffid harvester_local_overwrite: abstract harvester_local_overwrite: place_of_pub harvester_local_overwrite: creators_id harvester_local_overwrite: institution harvester_local_overwrite: date harvester_local_overwrite: pages harvester_local_overwrite: hal_id harvester_local_overwrite: hal_version harvester_local_overwrite: hal_url harvester_local_overwrite: hal_passwd oai_lastmod: 2024-06-28T15:27:37Z oai_set: tse site: ut1 hal_id: hal-04595597 hal_passwd: sj91usx hal_version: 1 hal_url: https://hal.science/hal-04595597 citation: Cremer, Helmuth and Lozachmeur, Jean-Marie (2024) Nonlinear reimbursement rules for preventive and curative medical care. TSE Working Paper, n. 24-1527, Toulouse document_url: https://publications.ut-capitole.fr/id/eprint/49336/1/wp_tse_1527.pdf