Supplementary private health insurance and health care utilization of people aged 50+

Does supplementary private health insurance (PHI) coverage influence health care utilization in countries where the coverage ratio with public health insurance is high? I estimate this effect using the Survey of Health, Ageing and Retirement in Europe. Handling the potential endogeneity of supplementary insurance coverage and the large fraction of zero observations in the utilization models influences the empirical results. I show that the effect of PHI coverage on inpatient and outpatient care utilization is not trivial even in countries with generous public health funding. The main finding is that supplementary PHI coverage increases dental care utilization, but decreases the visits to general practitioners. Private insurance is estimated to have little and insignificant influence on the utilization of inpatient care and outpatient specialist care. The magnitude of the effect of supplementary PHI on health care utilization varies with the characteristics of the health care systems.     

RISK ATTITUDES AND THE DEMAND FOR PRIVATE HEALTH INSURANCE: THE IMPORTANCE OF 'CAPTIVE PREFERENCES'

ABSTRACT ** :  Captivity to a mainstream public insurer, is hypothesized to constrain the choice of purchasing private health insurance, by influencing risk attitudes. Namely, risk averse individuals are more likely to stay captive to the National Health System (NHS). To empirically test this hypothesis we use a small scale database from Catalonia to explore the determinants of private health insurance (PHI) purchase under different forms of captivity along with a measure of risk attitudes. Our results confirm that the captivity corrections are significant and can potentially bias the estimates of the demand for PHI. Risk aversion increases the probability of an individual being captive to the NHS. The latter suggests a potential behavioural (or cultural) mechanism to isolate the influence of risk attitudes on the demand for PHI in publicly financed health systems.     

IS THERE A ‘SECESSION OF THE WEALTHY’? PRIVATE HEALTH INSURANCE UPTAKE AND NATIONAL HEALTH SYSTEM SUPPORT

The purchase of private health insurance (PHI) as a means to partially supplement the National Health System (NHS) coverage is often regarded as a potential signal for a declining support for the NHS. Exploiting the fact that PHI is typically purchased by the most affluent, in this paper we test the so called ‘secession of the wealthy’ hypothesis whereby the likelihood of expressing ‘lack of support for the NHS’ increases with having supplementary PHI. Using empirical data from Catalonia, we draw upon an empirical strategy that circumvents an obvious simultaneity problem by estimating both a recursive bivariate probit as well as an IV probit. After controlling for insurance premium, household income and other socio‐demographic determinants, we find that the purchase of PHI reduces the propensity of individuals to support the NHS. We also find evidence that PHI is a luxury good and sensitive to fiscal incentives.     

Determinants of private health insurance coverage among Mexican American men 2010–2013

Abstract

Background: Private health insurance (PHI) represents the largest source of insurance for Americans. Hispanic Americans have one of the lowest rates of PHI coverage. The largest group in the US Hispanic population are Mexican Americans; they account for about two in every three Hispanics. One in every three Mexican Americans aged 64 years and under did not have health insurance coverage. Mexican Americans have the most unfavorable health insurance coverage of any population group in the nation.

Objectives: The objective is to determine the factors associated with the gap in PHI coverage between Mexican American and non-Hispanic American men.

Methods: This study used the National Health Interview Surveys (2010–2013) as the sample. A non-linear Oaxaca-Blinder decomposition was run, estimating the explained and unexplained gap in PHI coverage between the groups. Several robustness tests of the model were also included.

Results: This study estimates that 44.4% of employed Mexican American men are covered by PHI compared to 79.5% of non-Hispanic American men. Nearly 60% of employed Mexican American men were found to be foreign born, 35% have an educational attainment less than a high school degree, and 40% are likely to have language barriers. Decomposition results show that income, low educational attainment, being foreign-born, and language barriers diminished the probability of private health insurance coverage for Mexican Americans, and that 10% of the gap is unexplained.

Conclusions: Most of the difference in the PHI rate between Mexican American men and non-Hispanic men is explained by observable differences in group characteristics: education, language, and immigration status. About 10% of the difference can be attributed to discrimination under the traditional interpretation of an Oaxaca-Blinder decomposition. The PHI rate gap is large and persistent for Mexican American men.     

How effective is “lifetime health cover” in raising private health insurance coverage in Australia? An assessment using regression discontinuity

The Australian government introduced three major private health insurance policy initiatives in recent years. These are, in chronological order, (i) the Private Health Insurance Incentives Scheme (PHIIS), which imposes a tax levy on high-income earners who do not have private health insurance and provides a means-tested subsidy schedule for low-income earners who purchase PHI; (ii) a 30% premium rebate for all private health insurance policies to replace the means-tested component under PHIIS; and (iii) lifetime health cover, which permits a limited form of age-related risk rating by insurance funds. Together, these policy changes have been effective in encouraging the uptake of PHI; the percentage of the population covered by PHI rose from 31% in 1999 to 45% at the end of 2001. The difficult issue, however, is in disentangling the effects of the three policy changes, given that they were introduced in quick succession. This article attempts to evaluate the effect of lifetime health cover using a regression discontinuity design, an approach that makes use of cross-section data that allows the effect of lifetime health cover to be isolated via local regression. The results suggest that the importance of lifetime health cover appears to be grossly over-rated in previous studies. Our estimates indicate that it accounts for roughly 22–32% of the combined effects of all the policy initiatives introduced in the late 1990s. While these figures suggest that its effect is clearly significant, it is nonetheless nowhere near the effect often associated with lifetime health cover.     

What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending

We study the impact of the introduction of one of the major pillars of the social insurance system in the United States: the introduction of Medicare in 1965. Our results suggest that, in its first 10 years, the establishment of universal health insurance for the elderly had no discernible impact on elderly mortality. However, we find a substantial reduction in the elderly's exposure to out of pocket medical expenditure risk. Specifically, we estimate that the introduction of Medicare was associated with a 40% decline in out of pocket spending for the top quartile of the out of pocket spending distribution. A stylized expected utility framework suggests that the welfare gains from such reductions in risk exposure alone may be sufficient to cover almost two-fifths of the costs of Medicare. These findings underscore the importance of considering the direct insurance benefits from public health insurance programs, in addition to any indirect benefits from an effect on health.     

代际货币转移对中国农村老年人卫生服务利用的影响研究

采用Andersen卫生服务利用行为模型,研究了净货币转移对中国农村老年人门诊服务利用数量的作用。采用多级分层的方法调查老年人(1050例),研究可利用资源和所需因素之间的相互作用,同时利用泊松回归对主效应和交互效应进行研究。净货币转移与门诊服务利用数量并不相关,但净货币转移与自评健康之间的交互作用的确存在。自评健康状况差或一般的老年人,以及获得较多净货币转移的老年人,使用门诊服务更为频繁。老年人对医疗服务的利用主要与健康需求有关。建议提供与支付能力相当的医疗保险,加强对农村老年人的公共援助。     

Using the stochastic health state function to forecast healthcare demand and healthcare financing: Evidence from Singapore

Typically, healthcare financing for an ageing population requires projections on healthcare demand and cost. However, projecting healthcare demand based on projected elderly does not consider changes in population health state over time. This paper proposes a new approach to forecast health variables using a stochastic health state function and the well‐established Lee–Carter stochastic mortality model. With the estimated health state at each age over time, we project the hospitalization rate, healthcare demand, and financing cost for Singapore using historical life tables and hospital admission data. Our findings show that while hospital insurance claims increase owing to an aging population, improving health state could save costs from hospital insurance claims. This has policy implications: more attention should be given to preventive healthcare such as health screening to improve the overall health state of the population.     

Public provision of health insurance and aggregate saving in an overlapping generations model with endogenous health risk: The South Korean case

This paper examines the effect of expanding public health insurance in South Korea on medical expenditures and aggregate saving using an overlapping generations model with endogenous health risk. South Korea had a substantial underinsured population, which is aging rapidly. Higher public health insurance benefits reduce individual medical expenditure and health risks but lead to a modest decline in individual and aggregate saving. Even after the expansion, the medical care coverage remains incomplete, and the elderly face a substantial risk of out-of-pocket medical expenditures.     

中国中老年人预防保健服务需求及其与住院需求的关系研究

利用中国健康与营养调查(CHNS)数据,采用二元双因变量Probit模型,分析我国45岁以上中老年人预防保健服务需求及其与住院需求的关系。中老年人的预防保健服务有效需求不足;医疗保险、收入状况对预防保健服务利用有显著影响;预防保健服务利用减少了后期住院的可能性。     

Health insurance and labor market outcomes: Joint decision-making within households

Most Americans obtain access to health insurance through an employer. In this paper, we ask how the link between health insurance and employment affects labor market choices such as whether to work full-time. To understand the effect of the incentives embedded in the employer-based insurance system, we study the joint decision-making of husbands and wives that determines the household's access to health insurance. We estimate the effect on a wife's (husband's) labor market outcomes of husband's (wife's) health insurance, allowing the health insurance of both spouses to be endogenous. Obtaining unbiased estimates of such effects is complicated by the likelihood that positive assortative mating creates correlations between a couple's characteristics and the possibility that there are important unobservable household income effects. Our innovation is to measure these biases by examining a second fringe benefit, paid sick leave, in addition to health insurance. We find that, as predicted, spouse's insurance has statistically significant negative effects on being offered own employer insurance as well as on the probability of working full-time with health insurance.     

THE ROLE OF RETIREE HEALTH INSURANCE IN THE EMPLOYMENT BEHAVIOR OF OLDER MEN*

Using data from the Health and Retirement Survey, we estimate preference and expectations parameters of a structural model of the employment and medical care decisions of older men in order to evaluate the role of health insurance. The budget constraint incorporates detailed cost‐sharing characteristics of private health insurance and Medicare as well as rules and requirements associated with Social Security and private pensions. Simulations imply that changes in health insurance, including access and restrictions to retiree health insurance and Medicare, have a modest impact on employment behavior among older males, with the greatest effect on men in bad health.     

The effect of non-employment-based health insurance program on firm's offering of health insurance: Evidence from the social health insurance system in China

To achieve universal health insurance coverage, many developing countries have established a segmented health insurance system, which contains separate programs for workers with formal employment and residents without formal employment. A potential concern with such a segmented system is that the establishment of a non-employment-based insurance program may generate a disincentive for firms to provide health insurance benefits to workers. In this study, we empirically examine this crowd-out effect of a non-employment-based insurance program, the Urban Residents Basic Medical Insurance (URBMI), in China. Exploiting city-by-year variations in the roll-out process of the program and utilizing a unique administrative dataset on Chinese firms, we find that the enactment of URBMI reduced a firm's offering of an employment-based health insurance program by a statistically significant 0.94-1.29 percentage point. This crowd-out effect was stronger among domestic private firms, new firms, and firms that are individual-owned.     

Investigating household choice for health and life insurance

The objective of this article is to investigate the joint determination of household choice for health and life insurance. Using the 2008–2009 Consumer Expenditure Survey data, we model household choice for health and life insurance assuming households consider purchasing them to manage financial risks in their life, after accounting for household characteristics, insurance characteristics, health status, and disability status. The model allows assessing the impact of health insurance choice on the choice of life insurance and the correlation between these two choices. The result suggests that health insurance choice positively affects the choice of life insurance and these two choices are positively correlated indicating complementary nature of these insurances in the basket of households’ risk minimising goods.     

More health care utilization with more insurance coverage? Evidence from a latent class model with German data

We analyse the impact of optional deductibles, private supplementary health insurance and income on the demand for health care utilization, measured as the number of physician visits with data from the German Socio-Economic Panel (SOEP). With a set of newly available variables for the years 2002, 2004 and 2006 that measure individual health more accurately and including risk-attitudes towards health we find that possible endogeneity of the insurance choice is not a problem. A latent class approach that takes into account the panel structure of the data reveals that especially individuals who have few doctor visits, the low users, respond strongest to insurance status and income. In this group we find that more insurance increases the demand for physician visits and there is a pro-rich inequity in health care utilization. No such effects are found for the high users.     

The determinants of the demand for private health insurance under Medicare

Since the introduction of Medicare in 1984, the proportion of the Australian population with private health insurance has declined considerably. Insurance for health care consumption is compulsory for the public health sector but optional for the private health sector. In this paper, we explore a number of important issues in the demand for private health insurance in Australia. The socio-economic variables which influence demand are examined using a binary logit model. A number of simulations are performed to highlight the influence and relative importance of various characteristics such as age, income, health status and geographical location on demand. A number of important policy issues in the private health insurance market are highlighted. First, evidence is provided of adverse selection in the private health insurance pool, second, the notion of the wealthy uninsured is refuted, and finally it is confirmed that there are significant interstate differences in the demand for private health insurance.     

Anti-insurance: Analysing the Health Insurance System in Australia

This paper develops a model to analyse the Australian health insurance system when individuals differ in their health risk and this risk is private information. In Australia private insurance both duplicates and supplements public insurance. We show that, absent any other interventions, this results in implicit transfers of wealth from those most at risk of adverse health to those least at risk. At the social level, these transfers represent a mean preserving spread of income, creating social risk and lowering welfare – what we call anti-insurance. The recently introduced rebate on private health insurance can improve welfare by alleviating anti-insurance.     

Welfare costs of reclassification risk in the health insurance market

We assess the quantitative importance of reclassification risk in the US health insurance market. Reclassification risk arises because the health conditions of individuals evolve over time, while a typical health insurance contract only lasts for one year. Thus, a change in the health status can lead to a significant change in the health insurance premium. We measure welfare gains from introducing explicit insurance against this risk in the form of guaranteed renewable health insurance contracts. We find that in the current institutional environment individuals are well-sheltered against reclassification risk and they only moderately gain from having access to these contracts. More specifically, we show that employer-sponsored health insurance and public means-tested transfers play an important role in providing implicit insurance against reclassification risk. If these institutions are removed, the average welfare gains from having access to guaranteed renewable contracts exceed 4% of the annual consumption.     

The Macroeconomic Consequences of Financing Health Insurance

Employer-financed health insurance systems like those used in the United States distort firms’ labor demand and adversely affect the economy. Since such costs vary with employment rather than hours worked, firms have an incentive to increase output by increasing worker hours rather than employment. Given that the returns to employment exceed the returns to hours worked, this results in lower levels of employment and output. In this paper, we construct a heterogeneous agent general equilibrium model where individuals differ with respect to their productivity and employment opportunities. Calibrating the model to the U.S. economy, we generate steady state results for several alternative models for financing health insurance: one in which health insurance is financed primarily through employer contributions that vary with employment, a second where insurance is funded through a non-distortionary, lump-sum tax, and a third where insurance is funded by a payroll tax. We measure the effects of each of the alternatives on output, employment, hours worked, and wages.