The Effect of Private Health Insurance on Medical Care Utilization and Self-Assessed Health in Germany

27 Pages Posted: 29 Jun 2010

See all articles by Patrick Hullegie

Patrick Hullegie

VU University Amsterdam; VU University Amsterdam - Department of Economics

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research; Tilburg University - Center for Economic Research (CentER); IZA Institute of Labor Economics; Netspar; Tilburg Law and Economics Center (TILEC)

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Abstract

In Germany, employees are generally obliged to participate in the public health insurance system, where coverage is universal, co-payments and deductibles are moderate, and premia are based on income. However, they may buy private insurance instead if their income exceeds the compulsory insurance threshold. Here, premia are based on age and health, individuals may choose to what extent they are covered, and deductibles and co-payments are common. In this paper, we estimate the effect of private insurance coverage on the number of doctor visits, the number of nights spent in a hospital and self-assessed health. Variation in income around the compulsory insurance threshold provides a natural experiment that we exploit to control for selection into private insurance. We document that income is measured with error and suggest an approach to take this into account. We find negative effects of private insurance coverage on the number of doctor visits, no effects on the number of nights spent in a hospital, and positive effects on health.

Keywords: private health insurance, medical care utilization, selection into insurance, measurement error, natural experiment, regression discontinuity design

JEL Classification: I11, I12, C31

Suggested Citation

Hullegie, Patrick and Hullegie, Patrick and Klein, Tobias J., The Effect of Private Health Insurance on Medical Care Utilization and Self-Assessed Health in Germany. IZA Discussion Paper No. 5004, Available at SSRN: https://ssrn.com/abstract=1631139 or http://dx.doi.org/10.2139/ssrn.1631139

Patrick Hullegie (Contact Author)

VU University Amsterdam

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

VU University Amsterdam - Department of Economics ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands

HOME PAGE: http://center.uvt.nl/staff/klein/index.html

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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