期刊名称：CORE Discussion Papers / Center for Operations Research and Econometrics (UCL), Louvain
出版年度：2000
卷号：2000
出版社：Center for Operations Research and Econometrics (UCL), Louvain
摘要：This paper analyzes the political support for a public insur-
ance in the presence of a private insurance alternative. The public insurance
is compulsory and offers a uniform insurance policy. The private insurance
is voluntary and can offer different insurance policies to different individ-
ual risks. We show that adverse selection on the private insurance market
can lead a majority of individuals to prefer public insurance over private
insurance, even if the median risk is below the average risk (so that the
median ends up subsidizing high-risk individuals). We alsoshow that more
risk aversion always leads to a greater political support for public insurance
and that a mixture of public and private insurance is politically non sustain-
able. Lastly, we demonstrate how progressively more powerful information
technology may help the private insurance market to mitigate the adverse
selection problem and reduce the demand for public insurance threatening
its political sustainability
