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Health insurance subsidies and deductible choice: Evidence from regional variation in subsidy schemes

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  • Kaufmann, Cornel
  • Schmid, Christian
  • Boes, Stefan

Abstract

The extent to which premium subsidies can influence health insurance choices is an open question. In this paper, we explore the regional variation in subsidy schemes in Switzerland, designed as either in-kind or cash transfers, to study their impact on the choice of health insurance deductibles. Using health survey data and a difference-in-differences methodology, we find that in-kind transfers increase the likelihood of choosing a low deductible plan by approximately 4 percentage points (or 7%). Our results indicate that the response to in-kind transfers is strongest among women, middle-aged and unmarried individuals, which we explain by differences in risk-taking behavior, health status, financial constraints, health insurance and financial literacy. We discuss our results in the light of potential extra-marginal effects on the demand for health care services, which are however not supported by our data.

Suggested Citation

  • Kaufmann, Cornel & Schmid, Christian & Boes, Stefan, 2017. "Health insurance subsidies and deductible choice: Evidence from regional variation in subsidy schemes," Journal of Health Economics, Elsevier, vol. 55(C), pages 262-273.
    • Handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:262-273
    DOI: 10.1016/j.jhealeco.2017.08.002
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    Cited by:

    1. Francetic, I.N.;, 2022. "Selection on moral hazard in the Swiss market for mandatory health insurance: Empirical evidence from Swiss Household Panel data," Health, Econometrics and Data Group (HEDG) Working Papers 22/24, HEDG, c/o Department of Economics, University of York.
    2. Vaidya, Shalvaree, 2021. "The impact of premium subsidies on health plan choices in Switzerland: Who responds to the incentives set by in-kind as opposed to cash transfers?," Health Policy, Elsevier, vol. 125(6), pages 675-684.
    3. Tamara Bischof & Christian P.R. Schmid, 2018. "Consumer price sensitivity and health plan choice in a regulated competition setting," Health Economics, John Wiley & Sons, Ltd., vol. 27(9), pages 1366-1379, September.
    4. Christian P R Schmid & Nicolas Schreiner & Alois Stutzer, 2022. "Transfer Payment Systems and Financial Distress: Insights from Health Insurance Premium Subsidies," Journal of the European Economic Association, European Economic Association, vol. 20(5), pages 1829-1858.
    5. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.

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    More about this item

    Keywords

    Health plan choice; Deductibles; Premium subsidies; In-kind transfers; Number of doctor consultations; Difference-in-differences;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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