Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution

19 Pages Posted: 20 Jan 2016

See all articles by Daniele Fabbri

Daniele Fabbri

University of Bologna - Department of Economics

Chiara Monfardini

University of Bologna - Department of Economics; IZA Institute of Labor Economics

Date Written: February 2016

Abstract

We investigate whether in a mixed insurance system, people enrolled into voluntary health care insurance (VHI) substitute public consumption with private (opt out) or just enlarge their private consumption without reducing reliance upon public provisions (top up). We specify a joint model for public and private specialist visits counts, allowing for different degrees of endogenous supplementary insurance coverage. We find evidence of opting out: richer and wealthier individuals consume more private services and concomitantly reduce those services publicly provided through selection into for‐profit VHI. Accounting for VHI endogeneity in the joint model of the two counts is crucial to this conclusion.

Suggested Citation

Fabbri, Daniele and Monfardini, Chiara, Opt Out or Top Up? Voluntary Health Care Insurance and the Public vs. Private Substitution (February 2016). Oxford Bulletin of Economics and Statistics, Vol. 78, Issue 1, pp. 75-93, 2016, Available at SSRN: https://ssrn.com/abstract=2718677 or http://dx.doi.org/10.1111/obes.12107

Daniele Fabbri (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

Chiara Monfardini

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy
0039 51 2098148 (Phone)
0039 51 221968 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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