Impact of supplemental insurance on access, expenditures and health: Evidence from Europe & the U.S.
- Presenter:
Mon June 5, 2006 9:30-10:45 Room Alumni Lounge
Context: Health insurance reform has been attempted many times in the U.S. and it will continue to be a heavily debated issue. Thus, it will be important to learn from the experiences of countries with social or tax-financed health insurance systems experimenting with different payment arrangements to help inform policy decisions in the U.S. on the appropriate mix of public and private health services and health insurance. To date, there have been a limited number of studies analyzing the impact of supplemental health insurance and out of pocket expenditures on health care utilization and health status in countries outside of the U.S.
Objectives: To study the purchase of supplementary insurance and evaluate health care expenditures, health care utilization, ex post static moral hazard and health status of older Europeans from 10 countries with social or tax-financed health insurance and varying private payment arrangements. To compare results to the experiences of Medicare beneficiaries in the U.S.
Methodology: We investigate our study objectives using data from the 2003 Survey of Health, Aging, and Retirement in Europe, which is a representative sample of the non-institutionalized population aged 50 and older in each country (Austria, Denmark, France, Germany, Greece, Netherlands, Italy, Spain, Sweden, & Switzerland). We model the probability of purchasing supplemental health insurance as a function of socioeconomic and health variables. We also model the number of outpatient visits (over one year) and total out-of-pocket health expenditures as a function of supplemental health insurance, characteristics of health care systems in each country, and individual characteristics. To address potential adverse selection (endogeneity of insurance) we rely on extensive health-related control variables (e.g. chronic conditions, diseases, smoking status, ADLs, mental health, parental health, self-reported health status) and multiple regression strategies (instrumental variables) to reduce the bias of unobserved heterogeneity. The existence of moral hazard is investigated by analyzing the relationship between the use of physician services and the price of care, conditional on health insurance characteristics, health status and other control variables.
Results: In all of these countries, individuals face some out of pocket payments, even though most are living in countries with public insurance. The two exceptions are Germany and the Netherlands, where most are privately insured (based on income thresholds). Only Switzerland has a private, mandatory insurance system financed through premiums. Out of pocket payments range from 11% (Germany) to 42% (Italy) of health expenditures, the majority going toward outpatient care and medications. The percent of survey respondents facing positive out of pocket expenditures ranges from 36.8% (France) to 88.7% (Sweden). 9.1% (Germany) to 86% (France) of the population purchases supplementary insurance. Deductibles, coinsurance, and copayments vary across countries. In most countries, the proportion of individuals with positive out of pocket expenditures is not significantly different between those who have supplementary insurance and those who do not. Early results from the multivariate models suggest that supplemental insurance has a significant effect on the utilization of physician services. Results from other models are pending.
