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Premium subsidies and social health insurance: Substitutes or complements?

  • Kifmann, Mathias
  • Roeder, Kerstin

Premium subsidies have been advocated as an alternative to social health insurance. These subsidies are paid if expenditure on health insurance exceeds a given share of income. In this paper, we examine whether this approach is superior to social health insurance from a welfare perspective. We show that the results crucially depend on the correlation of health and productivity. For a positive correlation, we find that combining premium subsidies with social health insurance is the optimal policy.

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Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 30 (2011)
Issue (Month): 6 ()
Pages: 1207-1218

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Handle: RePEc:eee:jhecon:v:30:y:2011:i:6:p:1207-1218
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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