Description
Book SynopsisThis text presents a theory of consumer demand for health insurance. It holds that people purchase insurance to obtain additional "income" when they become ill. In effect, insurance companies take premiums paid by those who remain relatively healthy and transfer them to the seriously ill.
Trade Review“This book thoroughly and critically re-examines two core beliefs in health economics: that health insurance induces individuals to overconsume care and that the demand for insurance is primarily driven by individuals' desire to avoid risk. It concludes that much of the increase in health care expenditures associated with insurance does not diminish welfare and that individuals' desire to increase their ability to afford health care when they fall ill is an important motivator for the purchase of health insurance. These ideas, though perhaps controversial, offer important insights to scholars and teachers working in this area and have important ramifications for policy makers and health care purchasers as they strive to constrain health care cost growth.”—Michael Chernew, University of Michigan
“This is a compelling and modern treatment of the demand for health insurance written by a leader in the field. The book is concise yet comprehensive, carefully researched, and clear. It is must reading for anyone interested in understanding alternative theories of the demand for health insurance, as well as the policy implications of these alternative theories.”—John A. Rizzo, The Ohio State University
