Published Paper Details:

Abstract Health insurance literature across the world is dominated by analysis of two market failures due to asymmetric information-Adverse selection and Moral hazard. Voluntary health insurance cannot be financially sustainable if adverse selection is severe, since consumers have better information about their health status and relatively unhealthy people tend to purchase it thus lead to high premium rates in health insurance market. Moral hazard is also a major theoretical concern in health insurance market as it results in greater health utilization for the insured individuals. These twin problems seriously limit the size of this market. The present paper is destined to check the presence of moral hazard. It is based on a primary survey of 386 households in Chandigarh city. With a cross sectional research design, data was collected using a pre-tested structured questionnaire. Area sampling was made use of as a sampling technique. The study found strong evidence of moral hazard using logistic regression technique.