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Supplemental Health Insurance and Healthcare Consumption—A Dynamic Approach to Moral Hazard

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  • Carine Franc
  • Marc Perronnin
  • Aurélie Pierre

Abstract

We analyze the existence and persistence of moral hazard over time to test the assumption of pent‐up demand. We consider the effects of supplemental health insurance provided by a private insurer when added to compulsory public insurance that is already supplemented by private insurance. Using original panel data from a French mutuelle, we study the influence of insurance on all of the dimensions of healthcare expenditures: (1) the probability of using health care, (2) the number of uses conditional on use, and (3) the per unit cost of care. To conduct this study, we control, to the extent possible, for endogeneity because of adverse selection using the characteristics of our panel data. Our study allows us to confirm a positive and significant effect of the extra complementary health insurance on healthcare consumption, primarily in terms of the probability of using care. More interestingly, our results show that these effects are principally transitory mainly for the probability of using dental care and optical care and depend on income. Finally, we show that individuals did not postpone health care before enrollment. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Carine Franc & Marc Perronnin & Aurélie Pierre, 2016. "Supplemental Health Insurance and Healthcare Consumption—A Dynamic Approach to Moral Hazard," Health Economics, John Wiley & Sons, Ltd., vol. 25(12), pages 1582-1598, December.
    • Handle: RePEc:wly:hlthec:v:25:y:2016:i:12:p:1582-1598
    DOI: 10.1002/hec.3271
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    Cited by:

    1. Kevin Devereux & Mona Balesh Abadi & Farah Omran, 2019. "Correcting for Transitory Effects in RCTs: Application to the RAND Health Insurance Experiment," Working Papers 201910, School of Economics, University College Dublin.
    2. Iwona Laskowska, 2015. "Private health insurance and the problem of moral hazard (Prywatne ubezpieczenia zdrowotne a problem pokusy naduzycia)," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 13(53), pages 58-68.
    3. Pierre, Aurélie & Jusot, Florence, 2017. "The likely effects of employer-mandated complementary health insurance on health coverage in France," Health Policy, Elsevier, vol. 121(3), pages 321-328.
    4. Lan Nguyen & Andrew C. Worthington, 2023. "Moral hazard in Australian private health insurance: the case of dental care services and extras cover," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 48(1), pages 157-176, January.
    5. Lavaste, Konsta, 2023. "Private health insurance in the universal public healthcare system: The role of healthcare provision in Finland," Health Policy, Elsevier, vol. 132(C).
    6. Raphaël Cottin, 2018. "Free health care for the poor: a good way to achieve universal health coverage? Evidence from Morocco," Working Papers DT/2018/16, DIAL (Développement, Institutions et Mondialisation).

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