Question

What is moral hazard? Do you think it is reasonable to utilize co-payments and deductibles to deter over-utilization of healthcare? Please explain why/why not.

Answer 1

Moral Hazard

It is an ideology that individuals have some kind of incentives to prevent certain consequences. For example - insurance

Copayments are a general form of cost sharing under various health care insurance options . Cost sharing is the portion of costs covered by you out your savings.

Do you think it is reasonable to utilize co-payments and deductibles to deter over-utilization of healthcare?  

Yes it is a good idea since it makes the client aware that he need to spend a good portion of expense of his regular/over treatments out of his pocket.

Explain Why?

• it helps to reduce the abuse of health care insurances
• It ensure the availability of treatment at the rigt time for right patients
• It reduce polarization in health care
• It helps to build trust on health care those who doesn't have a health insurance
• It helps other patients to ensure their treatment without long waits
• It creates an awareness in the society against misuse of insurance policies and it's benefits
• It is cost effective on both governments and insurance companies to reduce unwanted costs.