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The Value of Fixed-Reimbursement Healthcare Insurance- Evidence from Cancer Patients in Ontario, Canada


  • Christopher Longo

    () (Health Services Management, DeGroote School of Business, Centre for Health Economics and Policy Analysis, McMaster University)

  • Michel Grignon

    () (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University)


Critical illness insurance (CII) is a fixed-reimbursement scheme conditioned on the event of a loss, not the size of the loss. We investigate demand for CII. Consumers will be willing to purchase CII depending on their degree of risk aversion to the cost of treating illness, their forgone income, and desire for being compensated for utility loss when sick. Using a theoretical model based on Eeckhoudt (2003), we run simulations using Canadian data for CII policy reimbursement dollar values of purchases, family income, cancer expenditure, and net wealth. We then evaluate how well these models predict actual CII purchases.

Suggested Citation

  • Christopher Longo & Michel Grignon, 2009. "The Value of Fixed-Reimbursement Healthcare Insurance- Evidence from Cancer Patients in Ontario, Canada," Centre for Health Economics and Policy Analysis Working Paper Series 2009-03, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
  • Handle: RePEc:hpa:wpaper:200903

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    Cited by:

    1. Nadine Gatzert & Alexander Maegebier, 2015. "Critical Illness Insurances: Challenges and Opportunities for Insurers," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 18(2), pages 255-272, September.

    More about this item


    health insurance; healthcare insurance; fixed-reimbursement insurance; state-utility transfer; expected utility; cancer;

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