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Who Opts out of the Statutory Health Insurance? A Discrete Time Hazard Model for Germany
Author(s) -
Bünnings Christian,
Tauchmann Harald
Publication year - 2015
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.3091
Subject(s) - endogeneity , actuarial science , incentive , instrumental variable , statutory law , auto insurance risk selection , public economics , casualty insurance , economics , health insurance , insurance policy , business , econometrics , microeconomics , health care , political science , law , economic growth
Summary 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 and 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 pragmatic decision making, with both incentives set by regulation and personality traits as relevant determinants. Copyright © 2014 John Wiley & Sons, Ltd.