Responses to Cost-Sharing: Do Socio-Demographic Characteristics Matter?

Patient cost-sharing in health insurance tends to reduce moral hazard, but the effect may differ between subgroups. For instance, one may expect low-income groups to react more strongly to cost-sharing than high incomes. With the help of a structural microsimulation model, we estimate the response to changes in cost-sharing across gender, age and income groups. We estimate the parameters of our model using Dutch individual-level healthcare data for the years 2011 to 2019. We find an overall average elasticity of approximately -0.11, with considerable variation in elasticities across age groups but only minimal variation across income quintiles or between genders. An increase in cost-sharing causes the largest increase in out-of-pocket expenditure for the elderly. Further, our calculations indicate that the rate of decrease in health care demand as a result of an increase in out-of-pocket payments is similar across all income quintiles. Consequently, our model does not support the notion that the current Dutch deductible represents a disproportionately large financial burden for low income groups.