title: Deductibles in health insurance: pay or pain?
abstract: We study a health-insurance market where individuals are offered coverage against both medical expenditures and losses in income due to illness. Individuals vary in their level of innate ability and their probability of falling ill. If there is private information about the probability of illness and an individual's innate ability is sufficiently low, we find that competitive insurance contracts yield screening partly in the form of co-payment, i.e., a deductible in pay, and partly in the form of reduced medical treatment, i.e., a deductible in pain.
authors.affiliation: University of Oslo. g.b.asheim@econ.uio.no
authors.forename: Geir B
authors.initials: GB
authors.lastname: Asheim
authors.forename: Anne Wenche
authors.initials: AW
authors.lastname: Emblem
authors.forename: Tore
authors.initials: T
authors.lastname: Nilssen
mesh_terms: D003258:Consumer Behavior; D003669:Deductibles and Coinsurance; D009664:Norway