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Co-pay and Feel Okay: Evidence of Illusory Health Gains from a Health Insurance Reform

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  • Alfredo R. Paloyo

Abstract

The reliability of general self-rated health status is examined using the reform of the public health insurance system of Germany in 2004 as a source of exogenous variation. Among others, the reform introduced a co-payment for ambulatory doctor visits and increased the co-payments for prescription drugs. This natural experiment allows identification of the causal impact of the program on self-assessed health and hence reveals the sensitivity of this subjective measure to a perturbation in the insurance system. Using data from the German Socio-Economic Panel, the results indicate that after the policy intervention, the respondents in the treated group perceived their own health status as better than their hypothetical untreated state even when there is no discernible impacton actual health.The reliability of general self-rated health status is examined using the reform of the public health insurance system of Germany in 2004 as a source of exogenous variation. Among others, the reform introduced a co-payment for ambulatory doctor visits and increased the co-payments for prescription drugs. This natural experiment allows identification of the causal impact of the program on self-assessed health and hence reveals the sensitivity of this subjective measure to a perturbation in the insurance system. Using data from the German Socio-Economic Panel, the results indicate that after the policy intervention, the respondents in the treated group perceived their own health status as better than their hypothetical untreated state even when there is no discernible impacton actual health.

Suggested Citation

  • Alfredo R. Paloyo, 2009. "Co-pay and Feel Okay: Evidence of Illusory Health Gains from a Health Insurance Reform," SOEPpapers on Multidisciplinary Panel Data Research 225, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp225
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    1. Powdthavee, Nattavudh & van den Berg, Bernard, 2011. "Putting different price tags on the same health condition: Re-evaluating the well-being valuation approach," Journal of Health Economics, Elsevier, vol. 30(5), pages 1032-1043.

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    More about this item

    Keywords

    natural experiment; cognitive dissonance; self-rated health status;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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