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A perverse ‘net’ effect? Health insurance and ex-ante moral hazard in Ghana

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  • Yilma, Zelalem
  • van Kempen, Luuk
  • de Hoop, Thomas
Abstract
Incentive problems in insurance markets are well-established in economic theory. One of these incentive problems is related to reduced prevention efforts following insurance coverage (ex-ante moral hazard). This prediction is yet to be tested empirically with regard to health insurance, as the health domain is often considered relatively immune to perverse incentives, despite its validation in other insurance markets that entail adverse shocks. This paper tests for the presence of ex-ante moral hazard with reference to malaria prevention in Ghana. We investigate whether enrollment in the country's National Health Insurance Scheme (NHIS) negatively affects ownership and use of insecticide-treated bed nets (ITNs). We use a panel of 400 households in the Brong Ahafo region for this purpose and employ a propensity-adjusted household fixed effects model. Our results suggest that ex-ante moral hazard is present, especially when the level of effort and cost required for prevention is high. Implications of perverse incentive effects for the NHIS are briefly outlined.

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  • Yilma, Zelalem & van Kempen, Luuk & de Hoop, Thomas, 2012. "A perverse ‘net’ effect? Health insurance and ex-ante moral hazard in Ghana," Social Science & Medicine, Elsevier, vol. 75(1), pages 138-147.
    • Handle: RePEc:eee:socmed:v:75:y:2012:i:1:p:138-147
    DOI: 10.1016/j.socscimed.2012.02.035
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    3. Emmanuel Nshakira-Rukundo & Essa Chanie Mussa & Nathan Nshakira & Nicolas Gerber & Joachim von Braun, 2021. "Impact of community-based health insurance on utilisation of preventive health services in rural Uganda: a propensity score matching approach," International Journal of Health Economics and Management, Springer, vol. 21(2), pages 203-227, June.
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    5. Wanyue Dong & Jianmin Gao & Zhongliang Zhou & Ruhai Bai & Yue Wu & Min Su & Chi Shen & Xin Lan & Xiao Wang, 2018. "Effects of China’s urban basic health insurance on preventive care service utilization and health behaviors: Evidence from the China Health and Nutrition Survey," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-14, December.
    6. Jeffrey T Kullgren & Kevin G Volpp & Daniel Polsky, 2013. "Are the Healthy Behaviors of US High-Deductible Health Plan Enrollees Driven by People Who Chose These Plans? Smoking as a Case Study," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-6, February.
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    8. Binagwaho, Agnes & Hartwig, Renate & Ingeri, Denyse & Makaka, Andrew, 2012. "Mutual health insurance and its contribution to improving child health in Rwanda," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-66-12, University of Passau, Faculty of Business and Economics.
    9. Powell-Jackson, Timothy & Hanson, Kara & Whitty, Christopher J.M. & Ansah, Evelyn K., 2014. "Who benefits from free healthcare? Evidence from a randomized experiment in Ghana," Journal of Development Economics, Elsevier, vol. 107(C), pages 305-319.
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