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Health insurance in a democracy: Why is it public and why are premiums income related?

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  • Mathias Kifmann

Abstract

Many democracies have public health insurance systems which combine redistribution from the rich to the poor and from the healthy to the sick. This paper shows that such systems can be in the interest of the poor and the rich from a constitutional perspective. Necessary conditions are that insurance markets are incomplete and that income inequality is neither too low nor too high. Then even the rich can prefer a public health insurance system financed by income-dependent contributions compared to a system financed by a flat fee or a private health insurance system. Copyright Springer Science + Business Media, Inc. 2005

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  • 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.
    • Handle: RePEc:kap:pubcho:v:124:y:2005:i:3:p:283-308
    DOI: 10.1007/s11127-005-2049-z
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    1. Nuscheler, Robert & Roeder, Kerstin, 2015. "Financing and funding health care: Optimal policy and political implementability," Journal of Health Economics, Elsevier, vol. 42(C), pages 197-208.
    2. Ivonne Honekamp & Daniel Possenriede, 2008. "Redistributive effects in public health care financing," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 9(4), pages 405-416, November.
    3. H. E. Frech & Peter Zweifel, 2017. "Market Socialism and Community Rating in Health Insurance," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(3), pages 405-427, September.
    4. Lazuka, Volha, 2017. "The lasting health and income effects of public health formation in Sweden," Lund Papers in Economic History 153, Lund University, Department of Economic History.
    5. Pfarr, Christian & Schmid, Andreas, 2013. "The political economics of social health insurance: the tricky case of individuals’ preferences," MPRA Paper 44534, University Library of Munich, Germany.
    6. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Journal of Health Economics, Elsevier, vol. 29(6), pages 797-810, December.
    7. Kifmann, Mathias & Roeder, Kerstin, 2014. "The Political Sustainability of a Basic Income Scheme and Social Health Insurance," Discussion Papers in Economics 21601, University of Munich, Department of Economics.
    8. Kemnitz Alexander, 2013. "A Simple Model of Health Insurance Competition," German Economic Review, De Gruyter, vol. 14(4), pages 432-448, December.
    9. Haizhen Mou, 2012. "The political economy of public health expenditure and wait times in a public‐private mixed health care system," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1640-1666, November.
    10. J.C. Herbert Emery, 2010. "Understanding the Political Economy of the Evolution and Future of Single-Payer Public Health Insurance in Canada," SPP Technical Papers, The School of Public Policy, University of Calgary, February.
    11. Roger D. Congleton & Alberto Batinti & Rinaldo Pietratonio, 2017. "The Electoral Politics and the Evolution of Complex Healthcare Systems," Kyklos, Wiley Blackwell, vol. 70(4), pages 483-510, November.
    12. Ahlert, Marlies & Pfarr, Christian, 2014. "Attitudes of Germans towards distributive issues in the German health system," MPRA Paper 56881, University Library of Munich, Germany.
    13. Shuyun May Li & Solmaz Moslehi & Siew Ling Yew, 2016. "Public–private mix of health expenditure: A political economy and quantitative analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(2), pages 834-866, May.
    14. Volha Lazuka, 2019. "Early-Life Assets in Oldest-Old Age: Evidence From Primary Care Reform in Early Twentieth Century Sweden," Demography, Springer;Population Association of America (PAA), vol. 56(2), pages 679-706, April.

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