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<p><p>This paper develops an empirical strategy to estimate whether subsidies to private medical insurance are self-financing in countries where public and private insurance coexist and the latter covers the same treatments as the former. We construct a simulation routine based on a micro-econometric discrete choice model that allows us to evaluate the impact of premium changes on the utilization of outpatient and inpatient health care services. As an application, we estimate the budgetary effects of scrapping a subsidy from the purchase of individual private policies, using micro-data from Catalonia. Our results suggest that the subsidy is not self-financing. This result is driven by the fact that private medical insurance holders make concurrent use of public and private services, and by the price inelasticity of the demand for private policies.</p></p>
Authors
Marcos Vera-Hernandez
Research Fellow University College London
Marcos is a Research Fellow at IFS, an Affiliate at the Rural Education Action Program and a Professor of Economics at the University College London.
Ángel López Nicolás
Journal article details
- DOI
- 10.1016/j.jhealeco.2008.06.006
- Publisher
- Elsevier
- ISSN
- 0187-6296
- JEL
- H24, I18, C25
- Issue
- September 2008
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