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Optimal non-linear health insurance

1997; Elsevier BV; Volume: 16; Issue: 3 Linguagem: Inglês

10.1016/s0167-6296(96)00529-2

1879-1646

Åke Blomqvist,

Fiscal Policy and Economic Growth

Most theoretical and empirical work on efficient health insurance has been based on models with linear insurance schedules (a constant co-insurance parameter). In this paper, dynamic optimization techniques are used to analyse the properties of optimal non-linear insurance schedules in a model similar to one originally considered by Spence and Zeckhauser (American Economic Review, 1971, 61, 380–387) and reminiscent of those that have been used in the literature on optimal income taxation. The results of a preliminary numerical example suggest that the welfare losses from the implicit subsidy to employer-financed health insurance under US tax law may be a good deal smaller than previously estimated using linear models.