VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE

Abstract

Using data from SHARE (Survey of Health, Ageing and Retirement in Europe), we investigate the determinants of voluntary private health insurance (VPHI) among the over fifties in eleven European countries, and their effects on health care spending. Firstly, we find that the main determinants of VPHI are different in each country, reflecting differences in the underlying health care systems, but in most countries education levels and cognitive abilities have a strong positive effect on holding a VPHI policy. We also analyse the effect of holding a voluntary additional health insurance policy on out-of-pocket (OOP) health care spending. We adopt a simultaneous-equations approach to control for self-selection into VPHI policy holding and find that only in the Netherlands VPHI policyholders have lower OOP spending than the rest of the population while in some countries (Italy, Spain, Denmark and Austria) they spend significantly more. This could be due to increased utilisation but also to cost-sharing measures adopted by the insurers in order both to counter the effects of moral hazard and to keep adverse selection under control.

What characterises the privately insured in universal health care systems? A review of the empirical evidence

“…Several studies have analysed the determinants of VPHI and its effect on the use of health care services simultaneously [23,26,30,44,45,48,55,56,58]. This review only considers the methods and results concerning the characteristics of the privately insured for these studies.…”

“…Paccagnella et al [56] and Jones et al [55] estimated separate probit models for each country, while Bolin et al [57] analysed the countries collectively and included country-specific dummies to capture the effects of differences in culture and institutions. In all cases, the determinants of having VPHI were found to differ between countries, most likely reflecting differences in the institutional settings.…”

Out of pocket payments and social health insurance for private hospital care: Evidence from Greece

“…In our study, the direct formal OOP payments represent the individuals' health care payments on private hospitals and physicians with the provision of an official receipt. Formal cost sharing is the users' cost involvement for health services both for SHI and PHI (Paccagnella et al, 2013). The Greek government, in an effort to reduce public health financing, adopted high rates of patient cost sharing and benefits cuts for inpatient health care in private hospitals.…”

Heterogeneity in the smoking response to health shocks by out-of-pocket spending risk

“…The ex post mechanism: financial consequences After a health shock, individuals with high financial risk exposure may experience substantive OOP medical expendituresa common experience among older adults (Smith, 1999;Meara et al, 2004;Paez et al, 2009;De Nardi et al, 2010;Babiarz et al, 2013;Paccagnella et al, 2013). Before the health shock, individuals are unlikely to know the type, scope and total costs of medical treatments made necessary by a given condition.…”