Mechanism design of multi-strategy health insurance plans under asymmetric information

In health insurance services, the health system is often unable to obtain people’s private genetic information. This knowledge can reflect individuals’ future health, which leads to their information advantage. People with information advantages can hide their true private information and obtain insurance, which leads to service inefficiency for insurance providers. To reduce this inefficiency, we design a mechanism for the health system to build a set of multi-strategy combination insurance plans for heterogeneous probabilistic individuals, where the prices and the price difference of plans guide their choice and prevention strategy. First, after analysing the utility of the individuals and the health system when the individuals use true/false information, we propose a reasonable goal of this mechanism: When the people use true information to make decisions, the individuals and the health system can obtain maximum utility. Second, we provide the conditions for the individuals and the health system to participate in health insurance, and the conditions for achieving the rationality goal of the mechanism. Finally, we obtain the optimal result for the individuals and the health system. On one hand, some new theories on mechanism design are produced in health insurance transactions. On the other hand, the insurance scheme design effectively eliminates the individual’s motive for concealing information and improves the efficiency of health services.