The political economics of social health insurance: the tricky case of individuals’ preferences
AbstractSocial health insurance systems can be designed with different levels of state involvement and varying degrees of redistribution. In this article we focus on citizens’ preferences regarding the design of their health insurance coverage including the extent of redistribution. Using a microeconomic model we hypothesize that the individual’s preferred options are determined by the relative income position and the relative risk of falling ill. Only individuals who expect to realize a net profit through the implicit redistributive transfers will favour a public insurance coverage over a private one. We test this hypothesis empirically using three dis-tinct approaches. The first two are based on survey questions focusing on the type of coverage and the degree of redistribution respectively. The third is based on a discrete choice experiment thus accounting for trade-offs and budget constraints. The data is from a representative sample of 1.538 German individuals who were surveyed and participated in the DCE in early 2012. We find that the model has to be rejected. There is a wide consensus that redistributive elements should be an integral part of the social health insurance system and could even be extended. However, there are also preferences for health insurance coverage that can be individually optimized.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 44534.
Date of creation: Feb 2013
Date of revision:
social health insurance; preferences; discrete choice experiment;
Find related papers by JEL classification:
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-DCM-2013-03-16 (Discrete Choice Models)
- NEP-HEA-2013-03-16 (Health Economics)
- NEP-IAS-2013-03-16 (Insurance Economics)
- NEP-POL-2013-03-16 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kifmann, Mathias & Roeder, Kerstin, 2011.
"Premium subsidies and social insurance: Substitutes or complements?,"
hche Research Papers
2011/01, Hamburg Center for Health Economics (hche), University of Hamburg.
- Mathias Kifmann & Kerstin Roeder, . "Premium Subsidies and Social Insurance: Substitutes or Complements?," Working Papers 2011/01, Hamburg Center for Health Economics, University of Hamburg.
- Mark V. Pauly, 2002. "Why the United States does Not Have Universal Health Insurance: A Public Finance and Public Choice Perspective," Public Finance Review, , vol. 30(5), pages 349-365, September.
- Hanemann, W. Michael, 1983. "Marginal welfare measures for discrete choice models," Economics Letters, Elsevier, vol. 13(2-3), pages 129-136.
- Jan Kerssens & Peter Groenewegen, 2005. "Consumer preferences in social health insurance," The European Journal of Health Economics, Springer, vol. 6(1), pages 8-15, March.
- Pfarr, Christian, 2013. "Einkommen, Mobilität und individuelle Präferenzen für Umverteilung," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 30, number urn:isbn:9783161524714.
- Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June.
- Zweifel, Peter & Breuer, Michael, 2006. "The case for risk-based premiums in public health insurance," Health Economics, Policy and Law, Cambridge University Press, vol. 1(02), pages 171-188, April.
- Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
- Chung-Ping Loh & Katrin Nihalani & Oliver Schnusenberg, 2012. "Measuring attitude toward social health insurance," The European Journal of Health Economics, Springer, vol. 13(6), pages 707-722, December.
- Friedrich Breyer & Andreas Haufler, 2000.
"Health Care Reform: Separating Insurance from Income Redistribution,"
Discussion Papers of DIW Berlin
205, DIW Berlin, German Institute for Economic Research.
- Friedrich Breyer & Andreas Haufler, 2000. "Health Care Reform: Separating Insurance from Income Redistribution," International Tax and Public Finance, Springer, vol. 7(4), pages 445-461, August.
- Breyer, Friedrich & Haufler, Andreas, 1999. "Health care reform: Separating insurance from income redistribution," Discussion Papers, Series 1 296, University of Konstanz, Department of Economics.
- Essig, Lothar & Winter, Joachim, 2003.
"Item nonresponse to financial questions in household surveys: An experimental study of interviewer and mode effects,"
Sonderforschungsbereich 504 Publications
05-18, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Lothar Essig & Joachim K. Winter, 2009. "Item Non-Response to Financial Questions in Household Surveys: An Experimental Study of Interviewer and Mode Effects," Fiscal Studies, Institute for Fiscal Studies, vol. 30(Special I), pages 367-390, December.
- Lothar Essig & Joachim Winter, 2003. "Item nonresponse to financial questions in household surveys: An experimental study of interviewer and mode effects," MEA discussion paper series 03039, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Mickael Bech & Trine Kjaer & Jørgen Lauridsen, 2011. "Does the number of choice sets matter? Results from a web survey applying a discrete choice experiment," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 273-286, March.
- Marquis, M Susan & Holmer, Martin R, 1996. "Alternative Models of Choice under Uncertainty and Demand for Health Insurance," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 421-27, August.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
- Pekelman, Dov & Sen, Subrata K, 1979. " Measurement and Estimation of Conjoint Utility Functions," Journal of Consumer Research, University of Chicago Press, vol. 5(4), pages 263-71, March.
- Neil J. Buckley & Katherine Cuff & Jeremiah Hurley & Logan McLeod & Robert Nuscheler & David Cameron, 2012.
"Willingness-to-pay for parallel private health insurance: evidence from a laboratory experiment,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 45(1), pages 137-166, February.
- Neil Buckley & Katherine Cuff & Jeremiah Hurley & Logan McLeod & Robert Nuscheler & David Cameron, 2010. "Willingness-to-Pay for Parallel Private Health Insurance: Evidence from Laboratory Experiment," Centre for Health Economics and Policy Analysis Working Paper Series 2010-02, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
- Gouveia, Miguel, 1997.
" Majority Rule and the Public Provision of a Private Good,"
Springer, vol. 93(3-4), pages 221-44, December.
- Miguel Gouveia, 1997. "Majority rule and the public provision of a private good," Public Choice, Springer, vol. 93(3), pages 221-244, December.
- Mathias Kifmann, 2005. "Health insurance in a democracy: Why is it public and why are premiums income related?," Public Choice, Springer, vol. 124(3), pages 283-308, September.
- Zweifel, Peter & Breuer, Michael, 2006. "Reply to our critics," Health Economics, Policy and Law, Cambridge University Press, vol. 1(02), pages 201-202, April.
- Johnson, F. Reed & Desvousges, William H., 1997. "Estimating Stated Preferences with Rated-Pair Data: Environmental, Health, and Employment Effects of Energy Programs," Journal of Environmental Economics and Management, Elsevier, vol. 34(1), pages 79-99, September.
- Janet Vroomen & Peter Zweifel, 2011. "Preferences for health insurance and health status: does it matter whether you are Dutch or German?," The European Journal of Health Economics, Springer, vol. 12(1), pages 87-95, February.
- Breyer, Friedrich, 1995. "The Political Economy of Rationing in Social Health Insurance," Journal of Population Economics, Springer, vol. 8(2), pages 137-48, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.