Does the US health care safety net discourage private insurance coverage?

Abstract

The large and growing uninsured population poses an alarming threat to the US health care system, and is a major target of the Obama health reform. This paper investigates analytically and empirically the degree to which the absence of health insurance in the US reflects the availability of the health care safety net, such as the guaranteed or charitable care provided by emergency rooms, community health centers and physicians. Our theoretical model demonstrates that the safety net can be a real alternative to health insurance, thus discouraging private insurance purchase in the market setting. In particular, when the community premium rate fails to reflect the value of such resources, not purchasing insurance becomes a rational decision for a sizeable portion of the population. The calibrated simulation based on US statistics indicates about 15.75% of the uninsured population, or 7.2 million people in US, are attributable to the existing safety net system. Further empirical analysis using nationally representative data shows consistently that the presence of local safety net resources may reduce the probability of individual insurance purchase by as much as 45.9%.

SOCIOECONOMIC INEQUALITIES IN SELF-REPORTED HEALTH AND PHYSICAL FUNCTIONING IN ARGENTINA: FINDINGS FROM THE NATIONAL SURVEY ON QUALITY OF LIFE OF OLDER ADULTS 2012 (ENCaViAM)

“…Addressing health inequalities in Argentina is important due to the high proportion of older, particularly socially disadvantaged adults. These are, largely, more likely to benefit from both social policies leading to improvements in the welfare state (Qin & Liu, 2013) and reduction in socioeconomic inequalities (Stuckler et al, 2009).…”

The Impact of Increasing Health Insurance Coverage on Disparities in Mortality: Health Care Reform in Colombia, 1998–2007

“…There is controversy on the impact of insurance coverage on health outcomes and health disparities in Colombia, 3,6–9,13 the United States, 1,2,10,32 and elsewhere. 33–36 Although some studies have suggested that the subsidized scheme led to improvements in maternal and children’s health, 6 little is known about impact on adult outcomes and mortality.…”

“…1 People with lower socioeconomic status are at increased risk of many conditions and are therefore more likely to benefit from an expansion in health insurance coverage. 1 Previous observational studies in the United States have suggested that a lack of health insurance was associated with an increased risk of subsequent mortality in all socioeconomic groups. 2 However, little is known about the impact of health insurance coverage on socioeconomic disparities in mortality following a major expansion in insurance coverage.…”

Social health insurance vs private health insurance in China: Revisit crowd‐out effect based on a multiple mediation analysis

“…Blumberg et al used the 1990 SIPP to show that, of those children made eligible by expansions, only 4% as many lost private coverage as gained public coverage, providing an insignificant crowd‐out. Xuezheng Qin combined 3 risk‐undertaking tools: social safety net, self‐insurance, and private insurance into an expected utility framework—Consumer Insurance Demand Model. Under specific conditions, the size of social safety may reduce the probability of individual insurance purchase partly or even thoroughly.…”