Demand for Private Health Insurance in Germany
- Presenter:
Mon June 5, 2006 9:30-10:45 Room Alumni Lounge
Undoubtedly, demand for private health insurance in Germany is growing, alone in 2004 around 400.000 Germans have chosen one of the private coverage schemes. Between 2002 and 2003, about 300.000 of statutory insured persons have taken out outpatient supplementary private insurance, while in the same period, around 242.000 have taken out optional hospital benefits. We argue that perceived quality of private and public health care, insurance premiums and income are among the determinants of this growing demand. This study is the first in Germany that moves from theoretical to empirical framework. It uses economic modelling to analyze the effects of these determinants on the probability of purchasing private health insurance. Economic modelling states, demand for private health insurance is demand for high health care quality. The model was developed taking into consideration the unobserved endogeneity and heterogeneity. Results support the hypothesis that the demand for private health insurance is driven by the quality gap between both insurance sectors.
