How is their explanation incorrect? Your explanation is simply a rewording of theirs. Of course, apart from that you are disagreeing that it exists at all for health insurance. But the fact that consumers have "skin in the game" as it were in addition to the insurance doesn't mean there's no potential for moral hazard. No doubt, if there were no personal wellbeing implications of treating yourself unhealthily, moral hazard would be even more severe, but it still exists in some non-zero quantity as long as you have insurance. Does it explain all the effects that the article claims it explains? Not necessarily.