14% of Chronically Ill Patients Buy Too Much Insurance, Driving Up Costs
A 'Moral Hazard'
Going from basic, to medium, to comprehensive, the annual premium increased. But the deductible, co-insurance rate, and out-of-pocket maximum decreased.
Johns Hopkins University researcher Jian Ni, PhD, an associate professor in the Johns Hopkins Carey Business School is one of the study's authors.
In a news release, he called this escalation a "moral hazard." The individual doesn't mind choosing a more costly, but unnecessary plan, because he or she knows the insurer will pay for the bulk of it.
"Certainly some people with more serious conditions will benefit from a comprehensive plan and curative care, but the 14% in our study pose the kind of moral hazard that contributes to health care expenses in the U.S. that are higher than they probably should be, roughly a fifth of gross domestic product," Ni, said in the statement.
The study authors suggest that if physicians and insurers provide consumers with clearer instruction and guidance individuals would be more likely to select a health care plan that better fit their health status which would help contain costs to consumers and insurers.