The Theory of Social Health Insurance develops the theory of social health insurance also known as public health insurance. While a good deal is known about the demand and supply of private insurance, the theoretical basis of social health insurance is much more fragile. The book examines questions including why does social health insurance exist and even dominate private health insurance in most developed countries? What are the objectives and constraints of social health insurance managers? What is the likely outcome or ""performance"" of social health insurance? The authors review the conventional theory of demand for insurance and health insurance, the supply of health insurance in general and social health insurance in particular, the properties of the optimal health insurance contract, and whether there are factors limiting the growth of social health insurance.