Testing for Asymmetric Information in the Public Health Insurance Market in Vietnam: Towards the Accomplishment of Universal Health Insurance Coverage

This study investigates whether asymmetric information in the public health insurance market remains empirically relevant as coverage approaches universal levels. Focusing on Vietnam’s public health insurance system — characterized by a uniform benefit package and a gradual transition toward universal health coverage — we analyze five waves of nationally representative survey data spanning 2004 to 2020. Following the methodology of Chiappori and Salanié (2000), we test for a conditional correlation between insurance enrollment and realized health risks. Our results consistently demonstrate the persistence of asymmetric information throughout the study period, even as aggregate coverage among working-age adults exceeded 80% by 2020. Subgroup analyses reveal that while selection effects weaken in groups subject to near-automatic enrollment, such as government employees and students, they remain deeply entrenched among private-sector workers, the self-employed, and dependents who retain greater discretion in participation. These findings underscore that high aggregate coverage does not mechanically eliminate informational frictions. Consequently, the study highlights the critical importance of enrollment design and effective enforcement mechanisms in sustaining robust risk pooling and financial viability during the final stages of the transition to Universal Health Coverage.