Moral Hazard in Health Insurance

Addressing the challenge of covering heath care expenses—while minimizing economic risks.
 
Moral hazard—the tendency to change behavior when the cost of that behavior will be borne by others—is a particularly tricky question when considering health care. Kenneth J. Arrow’s seminal 1963 paper on this topic (included in this volume) was one of the first to explore the implication of moral hazard fo...