Disclosure of Medical Information in Health Insurance

Disclosure of private medical information allows insurance companies to better predict medical expenditures. The premiums the companies charge the insured employees reflect these expenditures. This paper studies incentives of employees to disclose their medical information. I find that healthier employees prefer to disclose medical information that results in a disclosure plan having a lower premium than a non disclosure plan. Furthermore, I find that if health plans have few employees and the employee turnover rate is high, it makes the incentive to disclose (or conceal) information stronger and the sorting of employees according to their health status more pronounced.