Commercial Health Insurance, Asymmetric Information

With the gradual deepening Social Medical Security System reform ,the traditional pattern of the socialized medicine is broken and paying the fee by the government has already become history .So it's an opportunity to develop health insurance. In fact, the development in health insurance is very slow. The author thinks that medical expenses' constant expansion is the key reason that insurance companies can not manage business in health insurance. How to control and reduce medical expenses' expansion is very difficult for insurance companies. This thesis points out from information asymmetric aspect that moral hazard and adverse selection are the crucial reasons for the trouble resulting in hindering commercialized operation of the medical insurance. The functioning of insurance mechanism must consider insurability. Because information asymmetric is closely related to insurability, the insurer must reduce the degree of information asymmetric in order to strengthen insurability.The thesis suggests some ideas about solving information asymmetric, by employing some achievements in advanced microeconomics, institutional economics and information economics. The author hopes more and more people could be concerned with information asymmetric in health insurance, which will lead to the health insurance's development.The thesis includes four chapters. In the first chapter, The author introduces some basic components of medical insurance and health insurance, moral hazard and adverse selection, etc. In the second chapter, the author addresses the consumers' behaviors when they buy health insurance policies. While insurers could observe information status of the consumers, a separating equilibrium would exist. While insurers could observe information status of the consumers, adverse selection of consumers would exist. The insurers can design the clause of policy to distinguish consumers between high risk type and low risk type. In the third chapter, the author analyzes a series of problems about moral hazard. Firstly, the consumers' behaviors will result in moral hazard. Secondly, the medical institution's behaviors will produce moral hazard. The medical institution's behaviors are analyzed through employing principal-agent theory. The author points out insurers should design an efficient incentive contract in order to standardize the behaviors of medical institution and reach the goal of insurers.In the fourth chapter, the author gives some suggestions on solving the problem about information asymmetric. First of all, corporate governance should be set up in insurance company. Secondly, the insurers should reduce consumers' behaviors of adverse selection through underwriting and designing the policy. Finally, the insurers should strengthen to control the behaviors of the insured and medical institution.