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VOLUNTARY PRIVATE HEALTH INSURANCE AMONG THE OVER 50s IN EUROPE
Author(s) -
Paccagnella Omar,
Rebba Vincenzo,
Weber Guglielmo
Publication year - 2013
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.2800
Subject(s) - adverse selection , moral hazard , turnover , health care , control (management) , business , public economics , demographic economics , actuarial science , health insurance , economics , economic growth , incentive , management , microeconomics
Using data from Survey of Health, Ageing and Retirement in Europe (SHARE), we investigate the determinants of voluntary private health insurance (VPHI) among the over 50s in 11 European countries and their effects on healthcare spending. First, we find that the main determinants of VPHI are different in each country, reflecting differences in the underlying healthcare systems, but in most countries, education levels and cognitive abilities have a strong positive effect on holding a VPHI policy. We also analyse the effect of holding a voluntary additional health insurance policy on out‐of‐pocket (OOP) healthcare spending. We adopt a simultaneous equations approach to control for self‐selection into VPHI policy holding and find that, only in the Netherlands, VPHI policyholders have lower OOP spending than the rest of the population, whereas in some countries (Italy, Spain, Denmark and Austria), they spend significantly more. This could be due to not only increased utilisation but also cost‐sharing measures adopted by the insurers to counter the effects of moral hazard and to keep adverse selection under control. Copyright © 2012 John Wiley & Sons, Ltd.