Moral hazard and selection for voluntary deductibles

This paper investigates whether the voluntary deductible in the Dutch health insurance system reduces moral hazard or acts only as a cost reduction tool for low-risk individuals. We use a sample of 14,089 observations, comprising 2,939 individuals over seven waves from the Longitudinal Internet Studies for the Social sciences panel for the analysis. We employ bivariate models that jointly model the choice of a deductible and health care utilization and supplement the identification with an instrumental variable strategy. The results show that the voluntary deductible reduces moral hazard, especially in the decision to visit a doctor (extensive margin) compared with the number of visits (intensive margin). In addition, a robustness test shows that selection on moral hazard is not present in this context.