Types of moral hazard in health insurance marketing (Review Article)

Health is recognized as one of the prerequisites for social welfare systems. Insurance coverage changes the behavior of the consumer (patient) and the provider (doctor) of the medical services, which is considered a moral hazard. This study was conducted with the aim of addressing the concept of moral hazard and its types and consequences in health insurance marketing.

This is a review article that its related articles have been selected from published literature in national and international databases. The database of English texts includes Pubmed, Science direct, Scopus and the Google Scholar search engine and Persian texts including Magiran, Sid, Irandoc, Iranmedex and Medlib. Articles were searched between the years of 2009 and 2018. Finally, among the articles founded, 52 related articles were selected, which studied moral hazard in health insurance system.

Moral hazards are caused by the change in service providers and consumer behavior as a result of being insured due to the presence of a third-party payer. The third-party is another agent or company, such as insurance, which covers the cost of patients and therefore the consumer and service provider are not motivated to reduce received services. In moral hazard, people with higher insurance coverage, make less efforts to prevent (ex-ante moral hazard), and with the onset of illness, they use more and better health care services (Ex-post moral hazard). The moral hazard of the consumer is the most significant form of moral hazard.

Moral hazards have negative consequences, such as reducing the welfare and increasing costs in the health system. It is essential to investigate and recognize the effects of moral hazard and its control in order to prevent undesirable outcomes and misallocation of resources. To control consumer moral hazard, one can use franchise, especially for highly elastic services.