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Who Opts Out of the Statutory Health Insurance? A Discrete Time Hazard Model for Germany

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  • Bünnings, Christian
  • Tauchmann, Harald

Abstract

The coexistence of social health insurance and private health insurance in Germany is subject to intense public debate. As only few have the opportunity to choose between the two systems, they are often regarded as privileged by the health insurance system. Applying a hazard model in discrete time, this paper examines the role of incentives set by the regulatory framework as well as the influence of individual personality characteristics on the decision to opt out of the statutory system. To address potential endogeneity of one of the key explanatory variables an instrumental variable approach is also applied. The estimation results yield robust evidence on the choice of health insurance type that is consistent with rational decision making, with both incentives set by regulation and personality traits as relevant determinants.

Suggested Citation

  • Bünnings, Christian & Tauchmann, Harald, 2013. "Who Opts Out of the Statutory Health Insurance? A Discrete Time Hazard Model for Germany," Ruhr Economic Papers 458, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:458
    DOI: 10.4419/86788517
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    Cited by:

    1. Christian Bührer & Stefan Fetzer & Christian Hagist, 2018. "Adverse Selection in the German Health Insurance System – The Case of Civil Servants," WHU Working Paper Series - Economics Group 18-06, WHU - Otto Beisheim School of Management.
    2. Sebastian Panthöfer, 2016. "Risk Selection under Public Health Insurance with Opt‐Out," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1163-1181, September.
    3. Huang, Shan & Salm, Martin, 2020. "The effect of a ban on gender-based pricing on risk selection in the German health insurance market," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 29(1), pages 3-17.
    4. repec:diw:diwwpp:dp1787 is not listed on IDEAS
    5. Bührer, Christian & Fetzer, Stefan & Hagist, Christian, 2020. "Adverse selection in the German Health Insurance System – the case of civil servants," Health Policy, Elsevier, vol. 124(8), pages 888-894.
    6. Kanika Kapur, 2020. "Private Health Insurance in Ireland: Trends and Determinants," The Economic and Social Review, Economic and Social Studies, vol. 51(1), pages 63-92.
    7. Thomas Neusius, 2021. "Inhomogenous risk exposure in dual insurance system: selection effects in Germany’s long-term care plans," SN Business & Economics, Springer, vol. 1(1), pages 1-24, January.
    8. Hassink Wolter H.J. & Koning Pierre & Zwinkels Wim, 2018. "Do Firms with Low Disability Risks Opt Out from Public to Private Insurance?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(1), pages 1-11, January.
    9. Shan Huang & Martin Salm, 2020. "The effect of a ban on gender‐based pricing on risk selection in the German health insurance market," Health Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 3-17, January.
    10. Polyakova, Maria, 2016. "Risk selection and heterogeneous preferences in health insurance markets with a public option," Journal of Health Economics, Elsevier, vol. 49(C), pages 153-168.
    11. Dauth, Christine, 2021. "The effects of private versus public health insurance on health and labor market outcomes," IAB-Discussion Paper 202103, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    statutory and private health insurance; incentives; personality traits;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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