A Study On Moral Hazard Of Commercial Medical Insurance

In recent years,China' social health insurance system has made great progress in institutional construction,providing basic health security for the masses.But with the aging of population and the improvement of living standards,people also have multi-level medical security needs.By purchasing commercial medical insurance,people can meet the needs of coverage beyond basic medical insurance.This is an important way to build a multi-level medical security system.However,if there is moral hazard arising from asymmetric information in insurance market,it will seriously hinder the healthy development of commercial medical insurance.In this thesis,“China Health and Retirement Longitudinal Study”2013 Follow-up Data are used to test ex-ante moral hazard problem and ex-post moral hazard problem of commercial medical insurance with econometric analysis such as Logit model and OLS model.The first mechanism is that the commercial medical insurance affects individual's health behaviors and precautionary motivation before he or she gets ill.Aiming at reducing health risk and the resulting medical expenditures,individuals could actively do some preventive health activities.However,once one enrolls in the commercial medical insurance,the price of the medical service will be lower,so as to eliminate the possibility of doing preventive health activities.This paper discusses the influence on commercial medical insurance on individual's health behaviors and precautionary motivation to find whether commercial medical insurance will lead to ex-ante moral hazard problems.The second mechanism is the impact on medical care conducts after illness caused by commercial medical insurance.Under the circumstances of constant medical supply,commercial medical insurance reduces healthcare costs placed on one individual,therefore creating rising demand for medical service.This paper focuses on the type of health care utilization such as out-patient and in-patient and the level of medical institution and medical expenses to investigate whether commercial medical insurance will lead to ex-post moral hazard problems.The main innovation of this study is that the ex-ante moral hazard and ex-post moral hazard of commercial medical insurance is brought into a uniform framework to be tested and analyzed,which can deepens the understanding of commercial medical insurance.The study finds commercial medical insurance has no significant influence on smoke,drink and exercise,while the possibility of annual physical significantly increases.Commercial medical insurance leads to the significant increase in the payment of out in-patient.This paper holds that there exists ex-post moral hazard in commercial medical insurance market.Accordingly we propose the following policy recommendations: strengthen the propaganda of insurance knowledge;strengthen the management of medical service process;improve the internal management of the insurance company;establish mutual supervision mechanism of government,society and market.