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Income and the Demand for Complementary Health Insurance in France

Author

Listed:
  • Michel Grignon

    () (McMaster University, Department of Economics and Department of Health, Aging, and Society, Hamilton, Ontario, Canada)

  • Bidénam Kambia-Chopin

    () (IRDES institut for research and information in health economics)

Abstract

This paper examines the demand for complementary health insurance (CHI) in the non-group market in France and the reasons why the near poor seem price insensitive. First we develop a theoretical model based on a simple tradeoff between two goods: CHI and a composite good reflecting all other consumptions. Then we estimate a model of CHI consumption and empirically test the impact of potential determinants of demand for coverage: risk aversion, asymmetrical information, non-expected utility, the demand for quality and health, and supply-side factors such as price discrimination. We interpret our empirical findings in terms of crossed price and income elasticity of the demand for CHI. Last, we use these estimates of elasticity to simulate the effect of various levels of price subsidies on the demand for CHI among those with incomes around the poverty level in France. We find that the main motivation for purchasing CHI in France is protection against the financial risk associated with co-payments in the public health insurance scheme. We also observe a strong income effect suggesting that affordability might be an important determinant. Our simulations indicate that no policy of price subsidy can significantly increase the take-up of CHI among the near poor; any increase in the level of subsidy generates a windfall benefit for richer households.

Suggested Citation

  • Michel Grignon & Bidénam Kambia-Chopin, 2009. "Income and the Demand for Complementary Health Insurance in France," Working Papers DT24, IRDES institut for research and information in health economics, revised Apr 2009.
  • Handle: RePEc:irh:wpaper:dt24
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    File URL: http://www.irdes.fr/EspaceAnglais/Publications/WorkingPapers/DT24IncomeDemandComplementHealthInsuranceFrance.pdf
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    References listed on IDEAS

    as
    1. Michel Grignon & Marc Perronnin & John N. Lavis, 2008. "Does free complementary health insurance help the poor to access health care? Evidence from France," Health Economics, John Wiley & Sons, Ltd., vol. 17(2), pages 203-219.
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    7. López Nicolás, Ángel & Vera-Hernández, Marcos, 2008. "Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model," Journal of Health Economics, Elsevier, vol. 27(5), pages 1285-1298, September.
    8. Robert B. Barsky & F. Thomas Juster & Miles S. Kimball & Matthew D. Shapiro, 1997. "Preference Parameters and Behavioral Heterogeneity: An Experimental Approach in the Health and Retirement Study," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 537-579.
    9. Joan Costa & Jaume Garcia, 2003. "Demand for private health insurance: how important is the quality gap?," Health Economics, John Wiley & Sons, Ltd., vol. 12(7), pages 587-599.
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    Citations

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    Cited by:

    1. Or, Zeynep & Cases, Chantal & Lisac, Melanie & Vrangbæk, Karsten & Winblad, Ulrika & Bevan, Gwyn, 2010. "Are health problems systemic? Politics of access and choice under Beveridge and Bismarck systems," Health Economics, Policy and Law, Cambridge University Press, vol. 5(03), pages 269-293, July.
    2. Thierry Debrand & Christine Sorasith, 2010. "Bouclier sanitaire : choisir entre égalité et équité ? Une analyse à partir du modèle ARAMMIS," Working Papers DT32, IRDES institut for research and information in health economics, revised Jun 2010.
    3. Thierry Debrand & Nicolas Sirven, 2009. "What are the Motivations of Pathways to Retirement in Europe: Individual, Familial, Professional Situation or Social Protection Systems?," Working Papers DT28, IRDES institut for research and information in health economics, revised Oct 2009.
    4. repec:dau:papers:123456789/7022 is not listed on IDEAS
    5. repec:dau:papers:123456789/9715 is not listed on IDEAS
    6. Florence Jusot & Clémence Perraudin & Jérôme Wittwer, 2011. "L’accessibilité financière à la complémentaire santé en France : les résultats de l’enquête Budget de Famille 2006," Économie et Statistique, Programme National Persée, vol. 450(1), pages 29-46.
    7. Pierre, Aurélie & Jusot, Florence, 2017. "The likely effects of employer-mandated complementary health insurance on health coverage in France," Health Policy, Elsevier, vol. 121(3), pages 321-328.
    8. Sophie Guthmuller & Florence Jusot & Jérôme Wittwer, 2014. "Improving Takeup of Health Insurance Program: A Social Experiment in France," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 167-194.
    9. Monique Kerleau & Anne Fretel & Isabelle Hirtzlin, 2009. "Regulating Private Health Insurance in France : New Challenges for Employer-Based Complementary Health Insurance," Post-Print halshs-00423931, HAL.
    10. Aurélie Pierre & Florence Jusot, 2015. "Une évaluation ex ante de la généralisation de la complémentaire santé d’entreprise sur les inégalités et les déterminants de la non-couverture," Working Papers DT67, IRDES institut for research and information in health economics, revised Jul 2015.
    11. repec:dau:papers:123456789/7734 is not listed on IDEAS
    12. Sophie Guthmuller & Florence Jusot & Jérôme Wittwer & Caroline Despres, 2010. "Le recours à l’Aide complémentaire santé : les enseignements d’une expérimentation sociale à Lille," Working Papers DT36, IRDES institut for research and information in health economics, revised Dec 2010.
    13. repec:dau:papers:123456789/1926 is not listed on IDEAS
    14. Thierry Debrand & Christine Sorasith, 2010. "Out-of-Pocket Maximum Rules under a Compulsatory Health Care Insurance Scheme: A Choice between Equality and Equity," Working Papers DT34, IRDES institut for research and information in health economics, revised Nov 2010.
    15. repec:dau:papers:123456789/11091 is not listed on IDEAS

    More about this item

    Keywords

    Demand for health insurance; Uninsured; Premium subsidies;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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