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Coverage Expansion of Universal Health Care and its Impacts on Health Insurance Market and Welfare: the Case of South Korea

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  • Lim, Taejun

Abstract

We examine how the coverage expansion of universal health care (UHC) affects the private health insurance (PHI) market and welfare using a quantitative macroeconomic model. Reduced medical expenditure and risk by the UHC coverage expansion leads individuals to save less and purchase less of PHI. The raised UHC premium to finance the coverage expansion discourages individuals to work since UHC is primarily financed by an earmarked payroll tax. Although the aggregate level labor, capital, output, and PHI take-up ratio decrease, welfare increases monotonically with the coverage expansion with the redistribution effect toward the old and the poor.

Suggested Citation

  • Lim, Taejun, 2021. "Coverage Expansion of Universal Health Care and its Impacts on Health Insurance Market and Welfare: the Case of South Korea," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 62(2), pages 141-161, December.
    • Handle: RePEc:hit:hitjec:v:62:y:2021:i:2:p:141-161
    DOI: 10.15057/hje.2021007
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    References listed on IDEAS

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    More about this item

    Keywords

    Universal Health Care; Private Health Insurance;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E69 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Other
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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