This paper investigates whether there is evidence of ex-ante moral hazard in health insurance—i.e., whether lower out-of-pocket costs lead to risky health behaviors. Understanding the role of ex-ante moral hazard is crucial, given that it can contribute to preventable health issues. I leverage the staggered rollout of U.S. state policies lowering insulin out-of-pocket costs and focus on privately insured households with diabetes. Using household-level grocery purchase data, I find that reduced insulin out-of-pocket costs result in increased purchases of sugar, a nutrient closely tied to insulin needs and linked to long-term health risks. Sales of diabetes supplies also rise, highlighting a shift from lifestyle management to treatment.

How should limited resources for health care be prioritized? Health economic evaluation can inform decision makers if new medical treatments are good value for money. The standard cost-effectiveness framework maximizes QALY gains without considering the distribution of these gains across individuals or groups. However, the way health is produced matters for most people. With general preferences for equity in society, also disease severity would matter for welfare when prioritizing. With public preferences over both disease severity and cost-effectiveness, and policymakers need to balance equity with efficiency. We provide evidence for how the public trades disease severity for cost-effectiveness from a novel striped-down discrete choice experiment, and we also provide a method for adjusting the ICER threshold to account for disease severity.

Population ageing places mounting pressure on public long-term care (LTC) finances, yet little is known about how behavioral bias shapes residential choices that affect fiscal sustainability. This paper examines how cost structure influences housing-with-care decisions and their implications for public LTC systems. Using a randomized survey experiment with 1,032 Japanese adults aged 50+, we vary the trade-off between upfront lump-sum payments and recurring monthly fees while holding service quality constant. Individuals with stronger present bias disproportionately select low-upfront options despite higher lifetime costs. Conversely, greater awareness of future care risk increases demand for higher initial payments that reduce long-term fiscal exposure. Making cumulative costs salient significantly shifts choices toward fiscally sustainable plans. These findings demonstrate that behavioral frictions—not only income constraints—distort intertemporal housing decisions in ageing societies, suggesting that improved cost transparency can align private incentives with public budget sustainability.

Intensifying climate change makes protection against natural disaster risk—through ex ante insurance or ex post aid—a central public policy issue. U.S. flood risk protection has relied on FEMA disaster aid and subsidized insurance through the National Flood Insurance Program (NFIP). To correct subsidy-induced overbuilding and under-mitigation in flood-prone areas, the NFIP recently moved to actuarially fair premiums. This reform has two unintended consequences: fiscal spillovers onto FEMA disaster aid as insurance coverage declines in flood-prone areas, and greater household exposure to uninsurable reclassification risk from uncertain climate projections. We develop a dynamic model of optimal flood insurance and estimate the five key parameters needed to implement it. We find that spillover and reclassification-insurance benefits outweigh moral hazard costs at low subsidy levels, implying an optimal subsidy of 46%, comparable to pre-reform subsidization.