Selection on moral hazard in the Swiss market for mandatory health insurance: Empirical evidence from Swiss Household Panel data

TL;DR

This paper investigates how moral hazard influences health insurance plan selection in Switzerland, showing that high-moral hazard individuals significantly increase their healthcare utilization when choosing low-deductible plans, using empirical data and advanced econometric models.

Contribution

It provides empirical evidence of selection on moral hazard in the Swiss health insurance market using household panel data and innovative econometric techniques.

Findings

High-moral hazard types respond 25-35% more to low-deductible plans.

Significant selection on slopes observed in Swiss health insurance.

Empirical estimation using Roy-type models and local instrumental variables.

Abstract

Selection on moral hazard represents the tendency to select a specific health insurance coverage depending on the heterogeneity in utilisation ''slopes''. I use data from the Swiss Household Panel and from publicly available regulatory data to explore the extent of selection on slopes in the Swiss managed competition system. I estimate responses in terms of (log) doctor visits to lowest and highest deductible levels using Roy-type models, identifying marginal treatment effects with local instrumental variables. The response to high coverage plans (i.e. plans with the lowest deductible level) among high moral hazard types is 25-35 percent higher than average.