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Do Optional Deductibles Reduce the Number of Doctor Visits?: Empirical Evidence with German Data

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  • Hendrik Schmitz

Abstract

Deductibles in health insurance are often regarded as a means to contain health care costs when individuals exhibit moral hazard. However, in the absence of moral hazard, voluntarily chosen deductibles may instead lead to self-selection into different insurance contracts. We use a set of new variables in the German Socioeconomic Panel for the years 2002, 2004, and 2006 that measure individual health more accurately and include risk-attitudes towards health in order to determine the price elasticity of demand for health care. A latent class approach that takes into account the panel structure of the data reveals that the effect of deductibles on the number of doctor visits is negligible. Private add-on insurance increases the number of doctor visits. However, altogether the effects of the insurance state on the demand for doctor visits are small in magnitude.

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Bibliographic Info

Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 141.

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Length: 22 p.
Date of creation: 2008
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Handle: RePEc:diw:diwsop:diw_sp141

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Keywords: Health insurance; deductibles; add-on insurance; count data; latent class panel model;

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