IDEAS home Printed from https://ideas.repec.org/a/eee/jhecon/v55y2017icp262-273.html
   My bibliography  Save this article

Health insurance subsidies and deductible choice: Evidence from regional variation in subsidy schemes

Author

Listed:
  • Kaufmann, Cornel
  • Schmid, Christian
  • Boes, Stefan

Abstract

The extent to which premium subsidies can influence health insurance choices is an open question. In this paper, we explore the regional variation in subsidy schemes in Switzerland, designed as either in-kind or cash transfers, to study their impact on the choice of health insurance deductibles. Using health survey data and a difference-in-differences methodology, we find that in-kind transfers increase the likelihood of choosing a low deductible plan by approximately 4 percentage points (or 7%). Our results indicate that the response to in-kind transfers is strongest among women, middle-aged and unmarried individuals, which we explain by differences in risk-taking behavior, health status, financial constraints, health insurance and financial literacy. We discuss our results in the light of potential extra-marginal effects on the demand for health care services, which are however not supported by our data.

Suggested Citation

  • Kaufmann, Cornel & Schmid, Christian & Boes, Stefan, 2017. "Health insurance subsidies and deductible choice: Evidence from regional variation in subsidy schemes," Journal of Health Economics, Elsevier, vol. 55(C), pages 262-273.
    • Handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:262-273
    DOI: 10.1016/j.jhealeco.2017.08.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167629616302065
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jhealeco.2017.08.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Michael Gerfin & Boris Kaiser & Christian Schmid, 2015. "Healthcare Demand in the Presence of Discrete Price Changes," Health Economics, John Wiley & Sons, Ltd., vol. 24(9), pages 1164-1177, September.
    2. Lex Borghans & Bart H. H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity Aversion," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 649-658, 04-05.
    3. Frean, Molly & Gruber, Jonathan & Sommers, Benjamin D., 2017. "Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act," Journal of Health Economics, Elsevier, vol. 53(C), pages 72-86.
    4. Janet Currie & Jonathan Gruber, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 431-466.
    5. Kunreuther,Howard C. & Pauly,Mark V. & McMorrow,Stacey, 2013. "Insurance and Behavioral Economics," Cambridge Books, Cambridge University Press, number 9780521608268, November.
    6. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
    7. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107016064, November.
    8. Stefan Boes & Michael Gerfin, 2016. "Does Full Insurance Increase the Demand for Health Care?," Health Economics, John Wiley & Sons, Ltd., vol. 25(11), pages 1483-1496, November.
    9. Frank, Richard G. & Lamiraud, Karine, 2009. "Choice, price competition and complexity in markets for health insurance," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 550-562, August.
    10. Sonia Jaffe & Mark Shepard, 2020. "Price-Linked Subsidies and Imperfect Competition in Health Insurance," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 279-311, August.
    11. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107638105, November.
    12. Asako S. Moriya & Kosali Simon, 2016. "Impact of Premium Subsidies on the Take-up of Health Insurance: Evidence from the 2009 American Recovery and Reinvestment Act (ARRA)," American Journal of Health Economics, MIT Press, vol. 2(3), pages 318-343, Summer.
    13. Jaffe, Sonia & Shepard, Mark, 2017. "Price-Linked Subsidies and Health Insurance Markups," Working Paper Series rwp17-002, Harvard University, John F. Kennedy School of Government.
    14. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107016057, November.
    15. repec:dau:papers:123456789/1623 is not listed on IDEAS
    16. Kunreuther,Howard C. & Pauly,Mark V. & McMorrow,Stacey, 2013. "Insurance and Behavioral Economics," Cambridge Books, Cambridge University Press, number 9780521845724, November.
    17. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    18. Jesse M. Cunha, 2014. "Testing Paternalism: Cash versus In-Kind Transfers," American Economic Journal: Applied Economics, American Economic Association, vol. 6(2), pages 195-230, April.
    19. Brigitte Dormont & Pierre‐Yves Geoffard & Karine Lamiraud, 2009. "The influence of supplementary health insurance on switching behaviour: evidence from Swiss data," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1339-1356, November.
    20. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107674165, November.
    21. Peter Zweifel & Roland Eisen, 2012. "The Supply of Insurance," Springer Texts in Business and Economics, in: Insurance Economics, edition 127, chapter 6, pages 205-263, Springer.
    22. Mark Duggan & Fiona M. Scott Morton, 2006. "The Distortionary Effects of Government Procurement: Evidence from Medicaid Prescription Drug Purchasing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 1-30.
    23. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    24. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    25. Mark V. Pauly, 1974. "Overinsurance and Public Provision of Insurance: The Roles of Moral Hazard and Adverse Selection," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 44-62.
    26. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, June.
    27. Lechner, Michael, 2011. "The Estimation of Causal Effects by Difference-in-Difference Methods," Foundations and Trends(R) in Econometrics, now publishers, vol. 4(3), pages 165-224, November.
    28. Gerritzen, Berit C. & Martínez, Isabel Z. & Ramsden, Alma, 2014. "Cantonal Differences in Health Care Premium Subsidies in Switzerland," Economics Working Paper Series 1420, University of St. Gallen, School of Economics and Political Science.
    29. Jeffrey Liebman & Richard Zeckhauser, 2008. "Simple Humans, Complex Insurance, Subtle Subsidies," NBER Working Papers 14330, National Bureau of Economic Research, Inc.
    30. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 391-430.
    31. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107627314, November.
    32. Asako S. Moriya & Kosali Simon, 2016. "Impact of Premium Subsidies on the Take-up of Health Insurance: Evidence from the 2009 American Recovery and Reinvestment Act (ARRA)," American Journal of Health Economics, University of Chicago Press, vol. 2(3), pages 318-343, Summer.
    33. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-1296, December.
    34. Acemoglu,Daron & Arellano,Manuel & Dekel,Eddie (ed.), 2013. "Advances in Economics and Econometrics," Cambridge Books, Cambridge University Press, number 9781107016040, November.
    35. Vatter, Adrian & Rüefli, Christian, 2003. "Do Political Factors Matter for Health Care Expenditure? A Comparative Study of Swiss Cantons," Journal of Public Policy, Cambridge University Press, vol. 23(3), pages 301-323, September.
    36. Ilyana Kuziemko & Katherine Meckel & Maya Rossin-Slater, 2013. "Do Insurers Risk-Select Against Each Other? Evidence from Medicaid and Implications for Health Reform," NBER Working Papers 19198, National Bureau of Economic Research, Inc.
    37. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
    38. Lex Borghans & Bart H.H. Golsteyn & James J. Heckman & Huub Meijers, 2009. "Gender Differences in Risk Aversion and Ambiguity," Working Papers 200903, Geary Institute, University College Dublin.
    39. Alderman, Harold, 2002. "Subsidies as a social safety net: effectiveness and challenges," Social Protection Discussion Papers and Notes 25299, The World Bank.
    40. K. P. M. Winssen & R. C. Kleef & W. P. M. M. Ven, 2016. "Potential determinants of deductible uptake in health insurance: How to increase uptake in The Netherlands?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(9), pages 1059-1072, December.
    41. Oliver Reich & Cornelia Weins & Claudia Schusterschitz & Magdalena Thöni, 2012. "Exploring the disparities of regional health care expenditures in Switzerland: some empirical evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(2), pages 193-202, April.
    42. Janet Currie, 2003. "US Food and Nutrition Programs," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 199-290, National Bureau of Economic Research, Inc.
    43. Luca Crivelli & Massimo Filippini & Ilaria Mosca, 2006. "Federalism and regional health care expenditures: an empirical analysis for the Swiss cantons," Health Economics, John Wiley & Sons, Ltd., vol. 15(5), pages 535-541, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francetic Igor, 2022. "Selection on moral hazard in the Swiss market for mandatory health insurance: Empirical evidence from Swiss Household Panel data," Papers 2208.03815, arXiv.org, revised Sep 2023.
    2. Vaidya, Shalvaree, 2021. "The impact of premium subsidies on health plan choices in Switzerland: Who responds to the incentives set by in-kind as opposed to cash transfers?," Health Policy, Elsevier, vol. 125(6), pages 675-684.
    3. Tamara Bischof & Christian P.R. Schmid, 2018. "Consumer price sensitivity and health plan choice in a regulated competition setting," Health Economics, John Wiley & Sons, Ltd., vol. 27(9), pages 1366-1379, September.
    4. Christian P R Schmid & Nicolas Schreiner & Alois Stutzer, 2022. "Transfer Payment Systems and Financial Distress: Insights from Health Insurance Premium Subsidies," Journal of the European Economic Association, European Economic Association, vol. 20(5), pages 1829-1858.
    5. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.
    2. Boris Kaiser & Christian Schmid, 2016. "Does Physician Dispensing Increase Drug Expenditures? Empirical Evidence from Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 71-90, January.
    3. Chen, Xuan & Flores, Carlos A. & Flores-Lagunes, Alfonso, 2015. "Going Beyond LATE: Bounding Average Treatment Effects of Job Corps Training," IZA Discussion Papers 9511, Institute of Labor Economics (IZA).
    4. Driouchi, Tarik & Trigeorgis, Lenos & So, Raymond H.Y., 2020. "Individual antecedents of real options appraisal: The role of national culture and ambiguity," European Journal of Operational Research, Elsevier, vol. 286(3), pages 1018-1032.
    5. Beerli, Andreas & Weiss, Franziska J. & Zilibotti, Fabrizio & Zweimüller, Josef, 2020. "Demand forces of technical change evidence from the Chinese manufacturing industry," China Economic Review, Elsevier, vol. 60(C).
    6. Christoph Trebesch & Jeromin Zettelmeyer, 2018. "ECB Interventions in Distressed Sovereign Debt Markets: The Case of Greek Bonds," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(2), pages 287-332, June.
    7. Abhishek Nagaraj, 2018. "Does Copyright Affect Reuse? Evidence from Google Books and Wikipedia," Management Science, INFORMS, vol. 64(7), pages 3091-3107, July.
    8. Jean-Francois Maystadt & Muhammad Kabir Salihu, 2015. "National or political cake?," Working Papers 100756558, Lancaster University Management School, Economics Department.
    9. John M. Brooks & Cole G. Chapman & Mary C. Schroeder, 2018. "Understanding Treatment Effect Estimates When Treatment Effects Are Heterogeneous for More Than One Outcome," Applied Health Economics and Health Policy, Springer, vol. 16(3), pages 381-393, June.
    10. Committee, Nobel Prize, 2021. "Answering causal questions using observational data," Nobel Prize in Economics documents 2021-2, Nobel Prize Committee.
    11. Elsby, Michael W.L. & Hobijn, Bart & Şahin, Ayşegül, 2015. "On the importance of the participation margin for labor market fluctuations," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 64-82.
    12. Wen Xu, 2016. "Estimation of Dynamic Panel Data Models with Stochastic Volatility Using Particle Filters," Econometrics, MDPI, vol. 4(4), pages 1-13, October.
    13. Özgür Orhangazi & A. Erinç Yeldan, 2021. "The Re‐making of the Turkish Crisis," Development and Change, International Institute of Social Studies, vol. 52(3), pages 460-503, May.
    14. Alessandra Bonfiglioli & Rosario Crinò & Gino Gancia, 2018. "Firms and Economic Performance: A view from Trade," Working Papers 1034, Barcelona School of Economics.
    15. Guriev, Sergei & Treisman, Daniel, 2020. "A theory of informational autocracy," Journal of Public Economics, Elsevier, vol. 186(C).
    16. Ufuk Akcigit & Sina T. Ates & Giammario Impullitti, 2018. "Innovation and Trade Policy in a Globalized World," NBER Working Papers 24543, National Bureau of Economic Research, Inc.
    17. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2015. "Offshoring and Directed Technical Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(3), pages 84-122, July.
    18. Makoto Shimoji, 2016. "Rationalizable Persuasion," Discussion Papers 16/08, Department of Economics, University of York.
    19. Ivan Balbuzanov, 2019. "Lies and consequences," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1203-1240, December.
    20. Raphael Corbi & Fabio Miessi Sanches, 2022. "Church Competition, Religious Subsidies and the Rise of Evangelicalism: a Dynamic Structural Analysis," Working Papers, Department of Economics 2022_09, University of São Paulo (FEA-USP).

    More about this item

    Keywords

    Health plan choice; Deductibles; Premium subsidies; In-kind transfers; Number of doctor consultations; Difference-in-differences;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jhecon:v:55:y:2017:i:c:p:262-273. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505560 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.