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Is There A ‘Secession Of The Wealthy’? Private Health Insurance Uptake And National Health System Support

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  • Joan Costa‐Font
  • Mireia Jofre‐Bonet

Abstract

The purchase of private health insurance (PHI) as a means to partially supplement the National Health System (NHS) coverage is often regarded as a potential signal for a declining support for the NHS. Exploiting the fact that PHI is typically purchased by the most affluent, in this paper we test the so called ‘secession of the wealthy’ hypothesis whereby the likelihood of expressing ‘lack of support for the NHS’ increases with having supplementary PHI. Using empirical data from Catalonia, we draw upon an empirical strategy that circumvents an obvious simultaneity problem by estimating both a recursive bivariate probit as well as an IV probit. After controlling for insurance premium, household income and other socio‐demographic determinants, we find that the purchase of PHI reduces the propensity of individuals to support the NHS. We also find evidence that PHI is a luxury good and sensitive to fiscal incentives.

Suggested Citation

  • Joan Costa‐Font & Mireia Jofre‐Bonet, 2008. "Is There A ‘Secession Of The Wealthy’? Private Health Insurance Uptake And National Health System Support," Bulletin of Economic Research, Wiley Blackwell, vol. 60(3), pages 265-287, July.
    • Handle: RePEc:bla:buecrs:v:60:y:2008:i:3:p:265-287
    DOI: 10.1111/j.1467-8586.2008.00285.x
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    References listed on IDEAS

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    Cited by:

    1. Bonsang, Eric & Costa-Font, Joan, 2022. "Buying control? ‘Locus of control’ and the uptake of supplementary health insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 476-489.
    2. Tynkkynen, Liina-Kaisa & Alexandersen, Nina & Kaarbøe, Oddvar & Anell, Anders & Lehto, Juhani & Vrangbӕk, Karsten, 2018. "Development of voluntary private health insurance in Nordic countries – An exploratory study on country-specific contextual factors," Health Policy, Elsevier, vol. 122(5), pages 485-492.
    3. Purcel, Alexandra-Anca & Dragos, Cristian Mihai & Mare, Codruța & Dragos, Simona Laura, 2023. "Voluntary health insurance and out-of-pocket payments in European OECD countries," Economic Modelling, Elsevier, vol. 120(C).
    4. García-Corchero, Juan David & Jiménez-Rubio, Dolores, 2022. "How do policy levers shape the quality of a national health system?," Journal of Policy Modeling, Elsevier, vol. 44(1), pages 203-221.
    5. Costa-Font, Joan & Ferrer-i-Carbonell, Ada, 2022. "Does devolution influence the choice and quality of public (vs private) health care?," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 632-653.
    6. Kullberg, Linn & Blomqvist, Paula & Winblad, Ulrika, 2019. "Health insurance for the healthy? Voluntary health insurance in Sweden," Health Policy, Elsevier, vol. 123(8), pages 737-746.
    7. Martinussen, Pål E. & Magnussen, Jon, 2019. "Is having private health insurance associated with less support for public healthcare? Evidence from the Norwegian NHS," Health Policy, Elsevier, vol. 123(7), pages 675-680.
    8. Pilar (P.) Garcia-Gomez & Helena M Hernandez-Pizarro & Guillem Lopez-Casasnovas & Joaquim Vidiella-Martin, 2019. "Unravelling Hidden Inequities in a Universal Public Long-Term Care System," Tinbergen Institute Discussion Papers 19-011/V, Tinbergen Institute.
    9. Martinussen, Pål E., 2022. "Let's stick together: The role of self-interest and ideological beliefs for supporting a ‘solidaristic’ health policy in Norway," Health Policy, Elsevier, vol. 126(3), pages 262-268.
    10. Marenzi, Anna & Rizzi, Dino & Zanette, Michele, 2021. "Incentives for voluntary health insurance in a national health system: Evidence from Italy," Health Policy, Elsevier, vol. 125(6), pages 685-692.
    11. Joan Costa-Font & Ada Ferrer-i-Carbonell, 2019. "Regional Decentralisation and the Demand for Public Health Care," Studies on the Spanish Economy eee2019-41, FEDEA.
    12. Joan Costa-i-Font & Valentina Zigante, 2014. "The Choice Agenda' in European Health Systems: The Role of 'Middle Class Demands," LEQS – LSE 'Europe in Question' Discussion Paper Series 82, European Institute, LSE.

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