Do Optional Deductibles Reduce the Number of Doctor Visits? Empirical Evidence with German Data
27 Pages Posted: 15 Dec 2008
There are 2 versions of this paper
Do Optional Deductibles Reduce the Number of Doctor Visits? Empirical Evidence with German Data
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: Suggested Citation
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