Law, College of
Nebraska Law Bulletin (Selected Issues)
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Date of this Version
12-20-2022
Document Type
Article
Citation
Nebraska Law Bulletin (December 20, 2022)
Abstract
A major issue to address with health insurance in any context, including the ACA, is that of moral hazard. Moral hazard refers to the tendency of any insured party to exercise less care to avoid an insured loss than would be exercised if the loss were not insured. It can result from the policyholders having better information about their actual care levels after coverage is purchased. Additionally, moral hazard requires that the insurer cannot perfectly monitor the policyholder’s level of care after the purchase of insurance. Moral hazard is more likely to occur if a behavior does not involve a policyholder’s own risk.
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