Do Optional Deductibles Reduce the Number of Doctor Visits? Empirical Evidence with German Data

27 Pages Posted: 15 Dec 2008

See all articles by Hendrik Schmitz

Hendrik Schmitz

University of Duisburg-Essen - Department of Economics and Business Administration

Multiple version iconThere are 2 versions of this paper

Date Written: November 1, 2008

Abstract

Deductibles in health insurance are often regarded as a means to contain health care costs when individuals exhibit moral hazard. However, in the absence of moral hazard, voluntarily chosen deductibles may instead lead to self-selection into different insurance contracts. We use a set of new variables in the German Socioeconomic Panel for the years 2002, 2004, and 2006 that measure individual health more accurately and include risk-attitudes towards health in order to determine the price elasticity of demand for health care. A latent class approach that takes into account the panel structure of the data reveals that the effect of deductibles on the number of doctor visits is negligible. Private add-on insurance increases the number of doctor visits. However, altogether the effects of the insurance state on the demand for doctor visits are small in magnitude.

Keywords: Health insurance, deductibles, add-on insurance, count data, latent class panel model

JEL Classification: I11, I18, G22

Suggested Citation

Schmitz, Hendrik, Do Optional Deductibles Reduce the Number of Doctor Visits? Empirical Evidence with German Data (November 1, 2008). Ruhr Economic Paper No. 76, Available at SSRN: https://ssrn.com/abstract=1316416 or http://dx.doi.org/10.2139/ssrn.1316416

Hendrik Schmitz (Contact Author)

University of Duisburg-Essen - Department of Economics and Business Administration ( email )

Universitätsstr. 9
Essen, 45141
Germany

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