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Cost-sharing in health insurance and its impact in a developing country: evidence from a quasi-natural experiment

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  • Ha Trong Nguyen

    () (Bankwest Curtin Economic Centre, Curtin University)

  • Luke B Connelly

    () (The University of Queensland)

Abstract

Though the impact of cost-sharing on health care demand is well documented in developed countries, evidence from developing countries is rare. This paper’s contribution is to analyse the impact of increasing coinsurance in a developing nation, Vietnam, by exploiting a quasi-natural experiment in that country. In 2007, the Vietnam government reintroduced a 20 percent coinsurance for individuals who hold voluntary health insurance policies. As individuals with compulsory health insurance were exempt from this re-imposition of coinsurance, this policy change may be regarded as a quasi-natural experiment. To exploit this change, we use a difference-in difference approach to examine whether the increase in coinsurance effectively reduced the demand for health care services among those affected. We find it has no statistically significant effect on the quantity of health care demanded. We however find that those who were under 18 or in low income households reduced their health care use after the increase in coinsurance. These findings hold – at least in the short-run, with a variety of different outcomes and estimators.

Suggested Citation

  • Ha Trong Nguyen & Luke B Connelly, 2017. "Cost-sharing in health insurance and its impact in a developing country: evidence from a quasi-natural experiment," Bankwest Curtin Economics Centre Working Paper series WP1702, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
  • Handle: RePEc:ozl:bcecwp:wp1702
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    References listed on IDEAS

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    Keywords

    Health insurance; Difference-in-difference; Cost-sharing; Developing country; Vietnam.;

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • 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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