New Health Insurance Findings Reported from Wilmington University (Which moral hazard? Health care reform under the Affordable Care Act of 2010)

Managed Care Weekly Digest

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Fresh data on Health Insurance are presented in a new report. According to news originating from New Castle, Delaware, by NewsRx editors, the research stated, "Purpose -Moral hazard is a concept that is central to risk and insurance management. It refers to change in economic behavior when individuals are protected or insured against certain risks and losses whose costs are borne by another party."

Our news journalists obtained a quote from the research from Wilmington University, "It asserts that the presence of an insurance contract increases the probability of a claim and the size of a claim. Through the US Affordable Care Act (ACA) of 2010, this study seeks to examine the validity and relevance of moral hazard in health care reform and determine how welfare losses or inefficiencies could be mitigated. Design/methodology/approach -This study is divided into three sections. The first contrasts conventional moral hazard from an emerging or alternative theory. The second analyzes moral hazard in terms of the evolution, organization, management, and marketing of health insurance in the USA. The third explains why and how salient reform measures under the ACA might induce health care consumption and production in ways that could either promote or restrict personal health and safety as well as social welfare maximization. Findings -Insurance generally induces health care (over) consumption. However, not every additional consumption, with or without adverse selection, can be considered wasteful or risky, even if it might cost insurers more in the short run. Moral hazard can generate welfare and equity gains. These gains might vary depending on which ACA provisions, insured population, covered illnesses, treatments, and services, as well as health outcomes are taken into account, and because of the relative ambiguities surrounding definitions of 'health.' Actuarial risk models can nonetheless benefit from incorporating welfare and equity gains into their basic assumptions and estimations. Originality/value -This is the first study which examines the ACA in the context of the new or alternative theory of moral hazard."

According to the news editors, the research concluded: "It suggests that containing inefficient moral hazard, and encouraging its desirable counterpart, are prime challenges in any health care reform initiative, especially as it adapts to the changing demographic and socio-economic characteristics of the insured population and regulatory landscape of health insurance in the USA."

For more information on this research see: Which moral hazard? Health care reform under the Affordable Care Act of 2010. Journal of Health Organization and Management, 2016;30(4):510-29. (Emerald Group Publishing - www.emeraldinsight.com; Journal of Health Organization and Management - www.emeraldinsight.com/journals.htm?issn=1477-7266)

The news correspondents report that additional information may be obtained from R.L. Mendoza, School of Business, Wilmington University, New Castle, Delaware, United States (see also Health Insurance).