Supplemental Health Insurance and Healthcare Consumption-A Dynamic Approach to Moral Hazard (original) (raw)
Related papers
Subscribing to Supplemental Health Insurance in France: A Dynamic Analysis of Adverse Selection
2010
Adverse selection, which is well described in the theoretical literature on insurance, remains relatively difficult to study empirically. The traditional approach, which focuses on the binary decision of “covered” or “not”, potentially misses the main effects because heterogeneity may be very high among the insured. In the French context, which is characterized by universal but incomplete public health insurance (PHI), we study the determinants of the decision to subscribe to supplemental health insurance (SHI) in addition to complementary health insurance (CHI). This work permits to analyze health insurance demand at the margin. Using a panelized dataset, we study the effects of both individual state of health, which is measured by age and previous individual health spending, and timing on the decision to subscribe. One striking result is the changing role of health risk over time, illustrating that adverse selection occurs immediately after the introduction of SHI. After the initi...
Who Took out Additional Supplementary Health Insurance? A dynamic Analysis of Adverse-Selection
I n s t i t u t e f o r R e s e a r c h a n d I n f o r m a t i o n i n H e a l t h E c o n o m i c s no 150-January 2010 According to economic theory, individuals choose their insurance cover levels in virtue of anticipated health expenditures. Thus, they partially reveal their health risks. Yet, on the French health insurance market this hypothesis, known as 'adverse-selection', has only been tested on the supplementary health insurance purchase decision. However, the supplementary health insurance market is extremely heterogeneous, at least in the same way as beneficiaries' health risk levels. Between July 1st 2003 and December 31st 2006, a mutual insurance fund for state employees (Mutuelle générale de l'équipement et des territoires) offered existing holders of its supplementary cover ('MGET basic') an additional health coverage ('MGET+'). This particular context, where individuals covered from the same supplementary health insurance decide to pu...
Health Economics, Policy and Law, 2007
As the share of supplementary health insurance (SI) in health care finance is likely to grow, SI may become an increasingly attractive tool for riskselection in basic health insurance (BI). In this paper, we develop a conceptual framework to assess the probability that insurers will use SI for favourable riskselection in BI. We apply our framework to five countries in which risk-selection via SI is feasible: Belgium, Germany, Israel, the Netherlands, and Switzerland. For each country, we review the available evidence of SI being used as selection device. We find that the probability that SI is and will be used for risk-selection substantially varies across countries. Finally, we discuss several strategies for policy makers to reduce the chance that SI will be used for risk-selection in BI markets.
Employer-mandated complementary health insurance in France: the likely effects on social welfare
Revue économique, 2018
In France, the Ani reform mandates all private sector employers to offer sponsored Complementary Health Insurance (CHI) to all of their employees beginning on January 1 st , 2016. If this mandate may reduce the cost of CHI coverage for employees, it may also prevent them choosing their optimal level of coverage given their health care needs, their income and their risk preferences. Furthermore, as employees are on average in good health status, the mandate is going to deteriorate the health risk of the pool of insured covered by individual policies, which may increase premiums. Welfare of individuals not affected by the reform (as retired and long term unemployed) may thus decrease. Wages may also potentially decrease by the employer subsidy amount. This research simulates the likely effects of this employer CHI mandate on the social welfare of the population making the most likely scenarios on the increase in individual policies premiums and the decrease in wages. It is based on the 2012 Health, Health Care and Insurance survey linked to the administrative data of the National Health Fund, which provides information on socioeconomic characteristics, CHI, health status, risk preferences and health care expenditures. The first results using an utilitarian social welfare function and an expected utility theory framework show that, if wages do not decrease and if we consider the lowest increase in individual CHI premiums, the Ani reform may induce a very weak increase in social welfare. This positive effect of the reform is mainly driven by the employer subsidy rather by the reduction of financial risk exposure and exists despite the loss of welfare of those who previously chose to be uninsured. However, as soon as we assume a decrease in wages by the employer subsidy, the reform may greatly reduce social welfare. The loss of welfare that may suffer insured on the CHI individual market is therefore hardly offset by the gain in welfare that may benefit private sector employees, while the former are more often vulnerable. There may be a lot of losers while the part of winners is rather small. Those first results will be completed by an additional analysis using an Atkinson social welfare function in order to explore the consequences of various degrees of inequalities aversion in the evaluation of this reform.
The potential premium range of risk-rating in competitive markets for supplementary health insurance
International Journal of Health Care Finance and Economics, 2009
In this paper, we simulate several scenarios of the potential premium range for voluntary (supplementary) health insurance, covering benefits which might be excluded from mandatory health insurance (MI). Our findings show that, by adding risk-factors, the minimum premium decreases and the maximum increases. The magnitude of the premium range is especially substantial for benefits such as medical devices and drugs. When removing benefits from MI policymakers should be aware of the implications for the potential reduction of affordability of voluntary health insurance coverage in a competitive market.
Moral hazard and the demand for health services: A matching estimator approach
Journal of Health Economics, 2008
We estimate the impact of extra health insurance coverage beyond a National Health System on the demand for several health services. Traditionally, the literature has tried to deal with the endogeneity of the private (extra) insurance decision by finding instrumental variables. Since a priori instrumental variables are hard to find we take a different approach. We focus on the most common health insurance plan in Portugal, ADSE, which is given to all civil servants and their dependents. We argue that this insurance is exogenous, i.e., not correlated with beneficiaries' health status. This identifying assumption allows us to estimate the impact of having ADSE coverage on the demand for three different health services using a matching estimator technique. The health services used are number of visits, number of blood and urine tests, and the probability of visiting a dentist. Results show large positive effects of ADSE coverage for number of visits and tests among the young (18 to 30 years old) but only the latter is statistically significantly different * We would like to thank Miguel Gouveia, Pierre-Carl Michaud, João Santos Silva, Marcos Vera-Hernández, and an anonymous referee for valuable comments on previous versions of this paper.
Social Health Insurance: A Quantitative Exploration
SSRN Electronic Journal, 2016
We quantitatively explore the welfare benets of health insurance over the lifecycle in a dynamic general equilibrium model with health risk and a health care sector. We consider three distinct approaches to designing a health insurance system: (i) a mixed private and public health insurance system similar to the US system, (ii) private health insurance (PHI), and (iii) universal public health insurance (UPHI). Our results indicate that the introduction of the US system into an economy without any health insurance results in large welfare gains, but does not produce the best welfare outcome. The PHI system with some government regulation on premiums is viable and produces welfare gains comparable to the welfare gains generated by the US system. The UPHI system with a high enough coinsurance rate produces better overall welfare outcomes than the other two systems. There exists an optional coinsurance rate that maximizes the welfare benets of the UPHI system. A structural reform that replaces the US system with the UPHI systemi.e., Medicare for allis welfare improving, but would face political headwinds due to opposing welfare eects across income groups.
Employer-mandated complementary health insurance in France: the likely effect on social welfare
2017
In France, the Ani reform mandates all private sector employers to offer sponsored Complementary Health Insurance (CHI) to all of their employees beginning on January 1 st , 2016. If this mandate may reduce the cost of CHI coverage for employees, it may also prevent them choosing their optimal level of coverage given their health care needs, their income and their risk preferences. Furthermore, as employees are on average in good health status, the mandate is going to deteriorate the health risk of the pool of insured covered by individual policies, which may increase premiums. Welfare of individuals not affected by the reform (as retired and long term unemployed) may thus decrease. Wages may also potentially decrease by the employer subsidy amount. This research simulates the likely effects of this employer CHI mandate on the social welfare of the population making the most likely scenarios on the increase in individual policies premiums and the decrease in wages. It is based on th...
2011
2006, this article examines health insurance choice and its dynamics. The article takes advantage of the panel data to examine the dynamics and determinants of insurance change. Evidence indicates that private insurance is losing customers to the public sector. Two analyses are undertaken in the article using logistic regressions. For each of the three years studied, the paper looks at insurance choice and its determinants. Income seems to be highly important in determining the choice, as well as age, education, gender, geographical location and health shocks. Evidence of moral hazard and adverse selection was found in the longitudinal and cross sectional analysis. The results of this research are aligned with most of the previous investigations done on Chile's health insurance system and advance previous knowledge on the topic by including the dynamism that panel data permits.
Complementary health insurance in France Who pays? Why? Who will suffer from public disengagement?
Health Policy, 2007
The study is based on a rare database with information about health status, socioeconomic characteristics and the complementary health insurance choices of the French population. We intend to characterise a two-stage decision process: first, the decision to purchase complementary health insurance, and then the factors related to choice of policy quality. Our econometric study indicates that (i) income level has a strong and significant effect on the decision to purchase complementary insurance, whilst there is no evidence that health risk considerations affect this decision at all; (ii) the individual decision about quality is associated barely if at all with any rational explanatory variables. The population's concrete behaviour, revealed by the study, is consistent with an allocation of low-risk people to private insurance and high-risk people to public insurance. Complementary insurance is not especially relevant to patients with serious diseases, who depend much more on the public system. If the public insurance system were to disengage significantly from coverage of serious illness, a vacuum would be created that would leave people at high risk without full coverage. These results have broad implications for numerous national systems of social protection seeking a new mix between private and public insurance.