Mommaerts, Corina Hong, Long <br/><br/>
Time Aggregation in Health Insurance Deductibles 

 -  American Economic Journal: Economic Policy  2024 
 - 270-299 
<br/><br/> Health insurance plans increasingly pay for expenses only beyond a large annual deductible. This paper explores the implications of deductibles that reset over shorter timespans. We develop a model of insurance demand between two actuarially equivalent deductible policies in which one deductible is larger and resets annually and the other deductible is smaller and resets biannually. Our model incorporates borrowing constraints, moral hazard, midyear contract switching, and delayable care. Calibrations using claims data show that the liquidity benefits of resetting deductibles can generate welfare gains of 3–10 percent of premium costs, particularly for individuals with borrowing constraints. 
<br/><br/><label>ISSN: </label>1945-7731 
<br/><br/><label>Subjects--Topical Terms: </label><br/> Insurance Companies<br/> Intertemporal Household Choice<br/> Life Cycle Models and Saving, Asymmetric and Private Information<br/> Mechanism Design, Insurance<br/>Actuarial Studies, Household Finance: Household Saving, Borrowing, Debt, and Wealth, Household Finance: Insurance, Health Insurance, Public and Private<br/>Health