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

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.