1- Department of Actuarial Science, Faculty of Mathematical Sciences, Shahid Beheshti University, Tehran, Iran , baratiactuary@gmail.com
2- Department of Actuarial Science, Faculty of Mathematical Sciences, Shahid Beheshti University, Tehran, Iran
2- Department of Actuarial Science, Faculty of Mathematical Sciences, Shahid Beheshti University, Tehran, Iran
Abstract: (19 Views)
Introduction: Coinsurance is traditionally employed in topping-up health insurance to mitigate moral hazard; however, empirical evidence suggests its efficacy is limited. This study evaluates the inefficiency of traditional coinsurance and proposes an alternative contractual framework incorporating a "No-Claim Bonus and Coverage Ceiling" (
Methods: A mixed-methods approach was adopted, combining theoretical modeling (utility theory) with empirical analysis. In the theoretical phase, the proposed model was evaluated through mathematical analysis and numerical simulations. In the empirical phase, over one million topping-up health insurance claim records spanning a two-year period were analyzed utilizing panel data regression models.
Results: Contrary to classical theoretical predictions, the empirical findings demonstrated a direct and positive relationship between coinsurance rates and claim amounts, indicating an "inverse effect" and the inefficiency of this tool in controlling moral hazard. Accounting for control variables (age, gender, and type of service) significantly enhanced the model's explanatory power, elevating the coefficient of determination (R2) from 3.7% to 28%. Furthermore, mathematical modeling confirmed the superiority of the proposed contract in maximizing the insured's expected utility (0.8997) and stimulating higher risk-reduction efforts compared to baseline models.
Conclusion: The findings indicate that traditional cost-sharing mechanisms like coinsurance fail to achieve optimal efficiency because they overlook behavioral incentives. The proposed dynamic "No-Claim Bonus and Coverage Ceiling" hybrid model offers a viable and efficient alternative for risk management and economic welfare optimization in the health insurance industry.
Methods: A mixed-methods approach was adopted, combining theoretical modeling (utility theory) with empirical analysis. In the theoretical phase, the proposed model was evaluated through mathematical analysis and numerical simulations. In the empirical phase, over one million topping-up health insurance claim records spanning a two-year period were analyzed utilizing panel data regression models.
Results: Contrary to classical theoretical predictions, the empirical findings demonstrated a direct and positive relationship between coinsurance rates and claim amounts, indicating an "inverse effect" and the inefficiency of this tool in controlling moral hazard. Accounting for control variables (age, gender, and type of service) significantly enhanced the model's explanatory power, elevating the coefficient of determination (R2) from 3.7% to 28%. Furthermore, mathematical modeling confirmed the superiority of the proposed contract in maximizing the insured's expected utility (0.8997) and stimulating higher risk-reduction efforts compared to baseline models.
Conclusion: The findings indicate that traditional cost-sharing mechanisms like coinsurance fail to achieve optimal efficiency because they overlook behavioral incentives. The proposed dynamic "No-Claim Bonus and Coverage Ceiling" hybrid model offers a viable and efficient alternative for risk management and economic welfare optimization in the health insurance industry.
Type of Study: Research |
Subject:
Special
Received: 2026/09/22 | Revised: 2026/09/22 | Accepted: 2026/09/1
Received: 2026/09/22 | Revised: 2026/09/22 | Accepted: 2026/09/1
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