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The effect of health on acute care supplemental insurance ownership: an empirical analysis

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  • Amir Shmueli

    (The Hebrew University and the Gertner Institute for Health Policy Research, Jerusalem, Israel)

Abstract

The empirical effect of health status on private insurance ownership is a mixture of the effect of health on the demand for insurance (subjected to adverse selection) and its effect on the insurer's underwriting practice (subjected to risk-selection). Using bivariate partial observability probit models, this paper provides an empirical identification of health effects on the probability of application and on the probability of rejection in the Israeli market for acute care supplemental health insurance. The analysis shows that while the reduced-form health effect on ownership is negligible, the structural effects are sizeable and indicate that sicker individuals are more likely to apply, but are also more likely to be rejected. The policy implications of the above findings are discussed in the context of the Israeli health system. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Amir Shmueli, 2001. "The effect of health on acute care supplemental insurance ownership: an empirical analysis," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 341-350.
  • Handle: RePEc:wly:hlthec:v:10:y:2001:i:4:p:341-350 DOI: 10.1002/hec.616
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    References listed on IDEAS

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    Cited by:

    1. Jeremiah Hurley & Rhema Vaithianathana & Thomas F. Crossley & Deborah Cobb-Clark, 2001. "Parallel Private Health Insurance in Australia: A Cautionary Tale and Lessons for Canada," Centre for Health Economics and Policy Analysis Working Paper Series 2001-12, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
    2. Kristian Bolin & Daniel Hedblom & Anna Lindgren & Bjorn Lindgren, 2010. "Asymmetric Information and the Demand for Voluntary Health Insurance in Europe," NBER Working Papers 15689, National Bureau of Economic Research, Inc.
    3. Denzil Fiebig & Elizabeth Savage & Rosalie Viney, 2006. "Does the reason for buying health insurance influence behaviour? CHERE Working Paper 2006/1," Working Papers 2006/1, CHERE, University of Technology, Sydney.
    4. Erik Schokkaert & Tom Van Ourti & Diana De Graeve & Ann Lecluyse & Carine Van de Voorde, 2010. "Supplemental health insurance and equality of access in Belgium," Health Economics, John Wiley & Sons, Ltd., vol. 19(4), pages 377-395.
    5. Thomas C. Buchmueller & Agnès Couffinhal & Michel Grignon & Marc Perronnin, 2004. "Access to physician services: does supplemental insurance matter? Evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 13(7), pages 669-687.
    6. Denise Doiron & Glenn Jones & Elizabeth Savage, 2006. "Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance, CHERE Working Paper 2006/2," Working Papers 2006/2, CHERE, University of Technology, Sydney.
    7. Kiil, Astrid, 2012. "What characterises the privately insured in universal health care systems? A review of the empirical evidence," Health Policy, Elsevier, vol. 106(1), pages 60-75.
    8. Ronald Eduardo Gómez Suárez, 2007. "Cream-Skimming And Risk Adjustment in Colombian Health Insurance System:: The Public Insurer Case," ARCHIVOS DE ECONOMÍA 004295, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    9. Castano, Ramon & Zambrano, Andres, 2006. "Biased selection within the social health insurance market in Colombia," Health Policy, Elsevier, vol. 79(2-3), pages 313-324, December.
    10. Perronnin, Marc, 2013. "Effet de l'assurance complémentaire santé sur les consommations médicales, entre risque moral et amélioration de l'accès aux soins," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/13659 edited by Wittwer, Jérôme.
    11. Denise Doiron & Glenn Jones & Elizabeth Savage, 2008. "Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 317-334.
    12. Buchmueller, Thomas C. & Fiebig, Denzil G. & Jones, Glenn & Savage, Elizabeth, 2013. "Preference heterogeneity and selection in private health insurance: The case of Australia," Journal of Health Economics, Elsevier, vol. 32(5), pages 757-767.
    13. Thomas Buchmueller, 2008. "Community Rating, Entry-Age Rating and Adverse Selection in Private Health Insurance in Australia*," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(4), pages 588-609, October.

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