The goal of programs to promote private health insurance in developing countries is often to allow citizens to gain access to additional health care, but according to conventional theory, this additional care moral hazard–is welfare-decreasing. This paper uses a new theory and data from Brazilto estimate the gain in health-related quality of life that is caused by the additional care that is generated by health insurance. It finds that supplemental private health insurance generates significant increases inquality of life, and that the cost of the quality adjusted life year gains appears to be commensurate with cost-utility ratios that are deemed welfare-increasing.