The effect of cancer diagnosis on switching health insurance in medicare

Because health insurance is intended to protect patients in the event of a health shock, it is important to evaluate health insurance policy in the context of patients who experience health shocks. I measure the effect of cancer diagnosis on health insurance switching in order to compare cancer patient's preferences among private and publicly administered Medicare. I estimate that a cancer diagnosis increases the probability a patient will leave a private Medicare plan, for the public plan, by 0.8% points (41%). Similarly, a cancer diagnosis decreases the probability a patient will leave the public Medicare plan, for a private plan, by 0.5% points (16%). The implication is that private Medicare plans are relatively less attractive to cancer patients than they are to noncancer patients.     

Risk segmentation and equity in the Chilean mandatory health insurance system

For decades, the Chilean health system has included a requirement for dependent workers to spend a certain percentage of their wages on health insurance. Since 1981, workers have been able to choose between public insurance and several private insurance providers. The reforms introduced more choice, moving away from reliance on an exclusive public provider. By 1999, about half of the country's active dependent workers had opted out of the public and into the private insurance system. The development of the private insurance system has been accompanied by controversy, however, regarding possible inequities in the utilization of medical services, the degree of risk segmentation, inefficiencies in the system's operation, and other factors. This paper discusses the issues of risk segmentation and equity. It starts by reviewing the system's design on a theoretical level, then deriving hypothesis and finally providing empirical evidence regarding these hypothesis. Particular attention is given to the issues of how individuals choose between the public and private system (to determine the reasons behind risk segmentation) and the differences in utilization among the various income groups (to clarify the issue of possible inequities).     

Public option and private profits

Background

The debate on US healthcare reform has largely focused on the introduction of a public health plan option. While supporters stress various beneficial effects that would arise from increased competition in the health insurance market, opponents often contend that a public plan would drive insurers out of the market and potentially lead to the ‘collapse’ of the private health insurance industry.

Objectives

To contribute to the US healthcare reform debate by inferring, from financial market data, the effect that the public option is likely to have on the private health insurance market.

Methods

The study utilized daily data on the price of a security that was traded in a prediction market from June 2009 and whose pay-off was tied to the event that a federal government-run healthcare plan — the ‘public option’ - would be approved by 31 December 2009 (100 daily observations). These data were combined with data on stock returns of health insurance companies (1500 observations from 100 trading days and 15 companies) to evaluate the expected effect of the public option on private health insurers. The impact on hospital companies (1000 observations) was also estimated.

Results

The results suggested that daily stock returns of health insurance companies significantly responded to the changing probability regarding the public option. A 10% increase in the probability that the public option would pass, on average, reduced the stock returns of health insurance companies by 1.28% (p < 0.001). Hospital company stock returns were also affected (0.9% reduction; p < 0.001).

Conclusions

The results reveal the market expectation of a negative effect of the public option on the value of health insurance companies. The magnitude of the effect suggests a downward adjustment in the expected profits of health insurers of around 13%, but it does not support more calamitous scenarios.     

The Mandatory Health Insurance System in Chile: Explaining the Choice between Public and Private Insurance

In Chile, dependent workers and retirees are mandated by law to purchase health insurance, and can choose between private and public health insurance. This paper studies the determinants of the choice of health insurance. Earnings are generally considered the key factor in this choice, and we confirm this, but find that other factors are also important. It is particularly interesting to analyze how the individual's characteristics interact with the design of the system to influence choice. Worse health, as signaled by age or sex (e.g., older people or women in reproductive ages), results in adverse selection against the public health insurance system. This is due to the lack of risk adjustment of the public health insurance's premium. Hence, Chile's risk selection problem is, at least in part, due to the design of the Chilean public insurance system.     

Redistribution through social health insurance: evidence on citizen preferences

The extent of social health insurance (SHI) and supplementary private insurance is frequently analyzed in public choice. Most of these analyses build on the model developed by Gouveia (1997), who defines the extent of SHI as consequence of a choice by self-interested voters. In this model, an indicator reflecting individuals’ relative income position and relative risk of falling ill determines the voting decision. Up to now, no empirical evidence for this key assumption has been available. We test the effect of this indicator on individuals’ preferences for the extent of SHI in a setting with mandatory SHI that can be supplemented by private insurance. The data is based on a DCE conducted in the field with a representative sample of 1538 German citizens in 2012. Conditional logit and latent class models are used to analyze preference heterogeneity. Our findings strongly support the assumptions of the models. Individuals likely to benefit from public coverage show a positive marginal willingness to pay (MWTP) for both a shift away from other beneficiary groups toward the sick and an expansion of publicly financed resources, and the expected net payers have a negative MWTP and prefer lower levels of public coverage.     

Complementary health insurance in France. Who pays? Why? Who will suffer from public disengagement?

The study is based on a rare database with information about health status, socioeconomic characteristics and the complementary health insurance choices of the French population. We intend to characterise a two-stage decision process: first, the decision to purchase complementary health insurance, and then the factors related to choice of policy quality. Our econometric study indicates that (i) income level has a strong and significant effect on the decision to purchase complementary insurance, whilst there is no evidence that health risk considerations affect this decision at all; (ii) the individual decision about quality is associated barely if at all with any rational explanatory variables. The population's concrete behaviour, revealed by the study, is consistent with an allocation of low-risk people to private insurance and high-risk people to public insurance. Complementary insurance is not especially relevant to patients with serious diseases, who depend much more on the public system. If the public insurance system were to disengage significantly from coverage of serious illness, a vacuum would be created that would leave people at high risk without full coverage. These results have broad implications for numerous national systems of social protection seeking a new mix between private and public insurance.     

Modelling the affordability and distributional implications of future health care financing options in South Africa

South Africa is considering introducing a universal health care system. A key concern for policy-makers and the general public is whether or not this reform is affordable. Modelling the resource and revenue generation requirements of alternative reform options is critical to inform decision-making. This paper considers three reform scenarios: universal coverage funded by increased allocations to health from general tax and additional dedicated taxes; an alternative reform option of extending private health insurance coverage to all formal sector workers and their dependents with the remainder using tax-funded services; and maintaining the status quo. Each scenario was modelled over a 15-year period using a spreadsheet model. Statistical analyses were also undertaken to evaluate the impact of options on the distribution of health care financing burden and benefits from using health services across socio-economic groups. Universal coverage would result in total health care spending levels equivalent to 8.6% of gross domestic product (GDP), which is comparable to current spending levels. It is lower than the status quo option (9.5% of GDP) and far lower than the option of expanding private insurance cover (over 13% of GDP). However, public funding of health services would have to increase substantially. Despite this, universal coverage would result in the most progressive financing system if the additional public funding requirements are generated through a surcharge on taxable income (but not if VAT is increased). The extended private insurance scheme option would be the least progressive and would impose a very high payment burden; total health care payments on average would be 10.7% of household consumption expenditure compared with the universal coverage (6.7%) and status quo (7.5%) options. The least pro-rich distribution of service benefits would be achieved under universal coverage. Universal coverage is affordable and would promote health system equity, but needs careful design to ensure its long-term sustainability.     

Public versus private: evidence on health insurance selection

This paper models health insurance choice in Chile (public versus private) as a dynamic, stochastic process, where individuals consider premiums, expected out-of pocket costs, personal characteristics and preferences. Insurance amenities and restrictions against pre-existing conditions among private insurers introduce asymmetry to the model. We confirm that the public system services a less healthy and wealthy population (adverse selection for public insurance). Simulation of choices over time predicts a slight crowding out of private insurance only for the most pessimistic scenario in terms of population aging and the evolution of education. Eliminating the restrictions on pre-existing conditions would slightly ameliorate the level (but not the trend) of the disproportionate accumulation of less healthy individuals in the public insurance program over time.     

Choices in health care: the European experience

This paper examines some policies to increase or restrict consumer choice in western European health systems as regards four decisions: choice between public and private insurance; choice of public insurance fund; choice of first contact care provider and choice of hospital. Choice between public and private insurance is limited and arose for historical reasons in Germany. Owing to significant constraints, few people choose the private option. Choice of public insurance fund tends to be exercised by younger and healthier people, the decision to change fund is mainly associated with price and, despite complex risk adjustment mechanisms, it has led to risk selection by funds. Choice of first contact care provider is widespread in Europe. In countries where choice has traditionally been restricted, reforms aim to make services more accessible and convenient to patients. Reforms to restrict direct access to specialists aim to reduce unnecessary and inappropriate care but have been unpopular with the public and professionals. Patients' take up of choice of hospital has been surprisingly low, given their stated willingness to travel. Only where choice is actively supported in the context of long waiting times is take up higher. The objectives, implementation and impact of policies about choice have varied across western Europe. Culture and embedded norms may be significant in determining the extent to which patients exercise choice.     

Inequities in mental health care after health care system reform in Chile

OBJECTIVES: We compared differences in mental health needs and provision of mental health services among residents of Santiago, Chile, with private and public health insurance coverage. METHODS: We conducted a cross-sectional survey of a random sample of adults. Presence of mental disorders and use of health care services were assessed via structured interviews. Individuals were classified as having public, private, or no health insurance coverage. RESULTS: Among individuals with mental disorders, only 20% (95% confidence interval [CI]=16%, 24%) had consulted a professional about these problems. A clear mismatch was found between need and provision of services. Participants with public insurance coverage exhibited the highest prevalence of mental disorders but the lowest rates of consultation; participants with private coverage exhibited exactly the opposite pattern. After adjustment for age, income, and severity of symptoms, private insurance coverage (odds ratio [OR]=2.72; 95% CI=1.6, 4.6) and higher disability level (OR=1.27, 95% CI=1.1, 1.5) were the only factors associated with increased frequency of mental health consultation. CONCLUSIONS: The health reforms that have encouraged the growth of the private health sector in Chile also have increased risk segmentation within the health system, accentuating inequalities in health care provision.     

Employee demand for health insurance and employer health plan choices

Although most private health insurance in US is employment-based, little is known about how employers choose health plans for their employees. In this paper, I examine the relationship between employee preferences for health insurance and the health plans offered by employers. I find evidence that employee characteristics affect the generosity of the health plans offered by employers and the likelihood that employers offer a choice of plans. Although the results suggest that employers do respond to employee preferences in choosing health benefits, the effects of worker characteristics on plan offerings are quantitatively small.     

Family planning clinic patients: their usual health care providers, insurance status, and implications for managed care.

PURPOSE: To understand the extent to which family planning clinic patients have health insurance or access to other health care providers, as well as their preferences for clinic versus private reproductive medical care. METHOD: An anonymous self-report questionnaire was administered at three Planned Parenthood clinics in Los Angeles County to 780 female patients aged 12-49 years. Dependent variables included insurance status, usual source of care, and a battery of questions regarding the importance of confidentiality. RESULTS: A total of 356 adolescents (aged 12-19 years) and 424 adults (aged 20-49 years) completed the survey in 1994. Fifty-nine percent of adolescents and 53% of adults had a usual source of care other than the clinic. The majority of each group reported some degree of continuity of care in their usual provider setting. Nearly half (49%) of all adolescents had health insurance compared with 27% of adults. Adolescents cited not wanting to involve family members as the primary reason for not using their usual providers, whereas adults were more likely to cite being uninsured. The majority of both adult and adolescent patients indicate they would prefer the clinic over private health care if guaranteed health care that was free, confidential, or both. CONCLUSION: Despite many patients' having health insurance and other sources of health care, family planning clinics were primarily chosen because of cost and confidentiality. Their reasons for preferring clinics may continue despite changes in access to insurance or efforts to incorporate similar reproductive services into mainstream health care provider systems. Making public or private health care funds available to family planning clinics through contracts or other mechanisms may facilitate patients' access to essential services and reduce potential service duplication.     

The spillover effects of health insurance benefit mandates on public insurance coverage: Evidence from veterans

This study examines how regulations in private health insurance markets affect coverage of public insurance. We focus on mental health parity laws, which mandate private health insurance to provide equal coverage for mental and physical health services. The implementation of mental health parity laws may improve a quality dimension of private health insurance but at increased costs. We graphically develop a conceptual framework and then empirically examine whether the regulations shift individuals from private to public insurance. We exploit state-by-year variation in policy implementation in 1999–2008 and focus on a sample of veterans, who have better access to public insurance than non-veterans. Using data from the Current Population Survey, we find that the parity laws reduce employer-sponsored insurance (ESI) coverage by 2.1% points. The drop in ESI is largely offset by enrollment gains in public insurance, namely through the Veterans Affairs (VA) benefit and Medicaid/Medicare programs.     

The role of private insurance in public health care systems: conceptual framework and policies

The structure of the health care system ans specifically the type and amount of the public and private mix is not a closed issue. This article provides and update of the arguments that justify public intervention in health, and emphasizes the failures of the private insurance market that call for mandatory universal health insurance, although that does not necessarily mean that state has to be the insurer.The relationship between both sectors and the variables determining the relative level of expenditure in both are also analyzed. Following the literature on the public provision of private goods, the level of expenditure in a democracy is seen to depend on the preferences of the median voter, where private insurance usually tops up public insurance. The key variable determining the decision to buy additional private insurance is the difference in quality, defined broadly, between both sectors.Concerning policies, the appropriateness of fiscal incentives to promote the uptake of private insurance is discussed and it is concluded that there is no clear evidence of its suitability. Also, it is argued that models in which the public and private sectors appear totally segregated or totally integrated are preferable to intermediate models, in which both sectors appear combined. Medical coverage bought by an informed agent in exchange for a capitation payment seems a better way to integrate the private sector than through a system of vouchers.     

¿Qué revela sobre el sistema público sanitario la contratación de un seguro de salud privado?

ObjectiveThis study examines individuals’ choice of private health insurance in Spain. Private health insurance choices reveal the attributes of health care most highly valued by the population, and the perceived responsiveness of the public system in delivering those preferences.MethodThe paper exploits the 2004, 2009 and 2014 waves of the national Health Barometer survey, examining the health insurance choice separately for the general population and a small but influential sector of elite public-sector employees who can opt out from the public health system (civil servants).ResultsPublic healthcare is a highly regarded provider in terms of technology and doctor training, even by those who chose private health insurance, but falls short in terms of amenities such as comfort and speed of attendance. These findings confirm well-known strengths and criticisms of the public system. However, the study also finds that citizens are concerned about the performance of the public sector in key domains of health system responsiveness, such as personal contact and information and these concerns also influence their decision to opt for private provision. Finally, civil servants, even the minority who opted for public provision, tend to have a lower opinion of the public health service than non-civil servants, especially in terms of personal contact, information, primary care and specialist care.ConclusionsThese perceptions and concerns of the public about the performance of the public health service will be of interest for policy makers and should be investigated further.     

Transitions from private to public health coverage among children: estimating effects on out-of-pocket medical costs and health insurance premium costs

Objective. To assess the effects of transitions from private to public health insurance by children on out‐of‐pocket medical expenditures and health insurance premium costs. Data Sources. Data are drawn from the 1996 and 2001 panels of the Survey of Income and Program Participation. We construct a nationally representative, longitudinal sample of children, ages 0–18, and their families for the period 1998–2003, a period in which states raised public health insurance eligibility rates for children. Study Design. We exploit the Survey of Income and Program Participation's longitudinal design to identify children in our sample who transition from private to public health insurance. We then use a bootstrapped instrumental variable approach to estimate the effects of these transitions on out‐of‐pocket expenditures and health insurance premium costs. Principal Findings. Children who transition from private to public coverage are relatively low‐income, are disproportionately likely to live in single‐mother households, and are more likely to be Black or of Hispanic origin. Child health status is highly predictive of transitions. We estimate that these transitions provide a cash‐equivalent transfer of nearly U.S.$1,500 annually for families in the form of reduced out‐of‐pocket and health insurance premium costs. Conclusions. Transitions from private to public health coverage by children can bring important social benefits to vulnerable families. This suggests that instead of being a net societal cost, such transitions may provide an important social benefit.     

Health insurance and health services utilization in Ireland

The numbers buying private health insurance in Ireland have continued to grow, despite a broadening in entitlement to public care. About 40% of the population now have insurance, although everyone has entitlement to public hospital care. In this paper, we examine in detail the growth in insurance coverage and the factors underlying the demand for insurance. Attitudinal responses reveal the importance of perceptions about waiting times for public care, as well as some concerns about the quality of that care. Individual characteristics, such as education, age, gender, marital status, family composition and income all influence the probability of purchasing private insurance. We also examine the relationship between insurance and utilization of hospital in-patient services. The positive effect of private insurance appears less than that of entitlement to full free health care from the state, although the latter is means-tested, and may partly represent health status.     

Pure altruism and misjudgement: A bad combination?

Stated preference studies on the value of health risk reductions have found valuations elicited from a private perspective to be both higher and lower compared to valuations elicited from a public perspective. Although relevant, the individual's ability to correctly predict the valuation that other individuals assign to the risk reduction has been insufficiently researched. We aim to verify whether individuals exhibit pure altruistic preferences and if this is the case, whether the presence of pure altruism leads to biased valuation of public risk reductions due to misjudgement about other individuals' preferences. We conduct a large-scale online incentivised experiment as a variant of a public good game in which the individual's final endowment is determined by choices made in the experiment. Results suggest that individuals act as pure altruists and hence try to account for the benefits obtained by others of being insured. The results also suggest that individuals fail to correctly predict other individuals' benefits from the insurance, which leads to non-optimal outcomes and biased valuations.     

Is having private health insurance associated with less support for public healthcare? Evidence from the Norwegian NHS

The purpose of this study was to investigate whether increased uptake of private health insurance (PHI) in a traditionally NHS type system is likely to affect support for the public healthcare system. Using the Norwegian healthcare system as our case, and building on a survey among 7500 citizens, with 2688 respondents, we employed multivariate analysis to uncover whether the preferences for public health services are associated with having PHI, controlling for key predictors such as socio-economic background, self-rated health and perceived health service quality, as well as age and gender. The basis for our analysis was the following two propositions related to the role of public healthcare, which the respondents were asked to score on a 5-point Likert scale (1 = “totally disagree”, 5 = “totally agree”): 1) “the responsibility of providing health services should mainly be public”, and 2) “the activity of private commercial actors should be limited”. The regression analyses showed that the willingness to increase the role of commercial private actors is positively associated with having a PHI. However, we found no relationship between holding a PHI and support for public provision of health services when other factors were controlled for.     

Building blocks for reform: achieving universal coverage with private and public group health insurance

This paper presents a framework for universal health insurance that builds on the current U.S. mixed private-public system by expanding group coverage through private markets and publicly sponsored insurance. This Building Blocks approach includes a new national insurance "connector" that offers small businesses and individuals a structured choice of a Medicare-like public option and private plans. Other features include an individual mandate, required employer contributions, Medicaid/State Children's Health Insurance Program (SCHIP) expansion, and tax credits to assure affordability. The paper estimates coverage and costs, and assesses the approach. Our findings indicate that the framework could reach near-universal coverage with little net increase in national health spending.