moral hazard and health disparities

Moral Hazards and Health Disparities
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Moral Hazards and Health Disparities
Moral Hazards
Moral hazards occur when a party gets involved if is risky knowing they are protected, and in case of any danger, the other party will be responsible for all the cost. Both the parties associated have incomplete information regarding the other. It occurs when the borrowing party knows that someone will take care of their mistakes. In health, it refers to added health care given when a person is insured.
An example of moral hazards is when a patient purchases some medicine that is not necessarily important or spends extra days or hours in the hospital voluntarily since they are aware of their insurance. These moral hazards disadvantage the insurers since they are forced to pay more than is expected from them and which premiums had not been set. Economists do not support the Moral hazards since it leads to a welfare loss in society. Insurers aim at reducing the health care price to Zero, but when they reduce the price consumers pay more for health care than they would have paid in the moral costs. The health care value offered to tend to be less as compared to the price. (John, 2014)
Health Disparities and Their Determinants
These are the inequalities, which occur when providing health care to different economic groups. Different ethnic and racial group access different types of health care. Some of the health disparities include,
Environmental Problems, some…