Choosing Health Insurance in a Dual Health Care System: The Chilean Case

Journal of Applied Economics, Vol. 5, No. 1, pp. 157-184, May 2002

Posted: 13 Jul 2004

See all articles by Ricardo Sanhueza

Ricardo Sanhueza

Universidad de los Andes, Chile - School of Economics and Managerial Sciences

Jaime Ruiz-Tagle V.

University of Chile - Department of Economics

Abstract

In Chile there is a public insurance system where people contribute a fixed percentage of their income, and also a private system where people pay a premium based on their personal characteristics. Using a large survey for 1996, we study the determinants of the decision to buy a private health plan. We find that the probability of buying a private health plan is positively correlated with income and living in areas with private health services providers. This probability decreases as families become older, and with a larger proportion of fertile age females. We also find that people who are more likely to demand health services prefer to buy a private health plan, and that people enrolled in a private health plan increase their use of health services. The segmentation observed in the health sector relates with the way private insurers and the public insurance system set their premiums.

Keywords: Health insurance, health services, income segmentation

JEL Classification: D81, I11

Suggested Citation

Sanhueza P., Ricardo and Ruiz-Tagle V., Jaime, Choosing Health Insurance in a Dual Health Care System: The Chilean Case. Journal of Applied Economics, Vol. 5, No. 1, pp. 157-184, May 2002. Available at SSRN: https://ssrn.com/abstract=562986

Ricardo Sanhueza P. (Contact Author)

Universidad de los Andes, Chile - School of Economics and Managerial Sciences ( email )

Chile

Jaime Ruiz-Tagle V.

University of Chile - Department of Economics

Diagonal Paraguay 257
Of. 1603
Santiago
Chile

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