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Premium subsidies and social insurance: Substitutes or complements?

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  • Kifmann, Mathias
  • Roeder, Kerstin

Abstract

Premium subsidies have been advocated as an alternative to social health insurance. These subsidies are paid if expenditure on health insurance exceeds a given share of income. In this paper, we examine whether this approach is superior to social insurance from a welfare perspective. We show that the results crucially depend on the correlation of health and productivity. For a positive correlation, we find that combining premium subsidies with social insurance is the optimal policy.

Suggested Citation

  • Kifmann, Mathias & Roeder, Kerstin, 2011. "Premium subsidies and social insurance: Substitutes or complements?," hche Research Papers 2011/01, University of Hamburg, Hamburg Center for Health Economics (hche).
    • Handle: RePEc:zbw:hcherp:201101
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    References listed on IDEAS

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    1. Kifmann, Mathias & Roeder, Kerstin, 2011. "Premium subsidies and social health insurance: Substitutes or complements?," Journal of Health Economics, Elsevier, vol. 30(6), pages 1207-1218.
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    3. Kifmann, Mathias & Roeder, Kerstin, 2011. "Premium subsidies and social insurance: Substitutes or complements?," hche Research Papers 2011/01, University of Hamburg, Hamburg Center for Health Economics (hche).
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    Cited by:

    1. Nuscheler, Robert & Roeder, Kerstin, 2015. "Financing and funding health care: Optimal policy and political implementability," Journal of Health Economics, Elsevier, vol. 42(C), pages 197-208.
    2. Hofer, Florian & Birkner, Benjamin & Spindler, Martin, 2021. "Power of machine learning algorithms for predicting dropouts from a German telemonitoring program using standardized claims data," hche Research Papers 24, University of Hamburg, Hamburg Center for Health Economics (hche).
    3. Ousmane Traoré, 2021. "The relationship between health poverty and income poverty in Sub-Saharan African countries: evidence from index correlations," SN Business & Economics, Springer, vol. 1(10), pages 1-19, October.
    4. Oliver Tiemann & Jonas Schreyögg, 2012. "Changes in hospital efficiency after privatization," Health Care Management Science, Springer, vol. 15(4), pages 310-326, December.
    5. Pfarr, Christian & Schmid, Andreas, 2013. "The political economics of social health insurance: the tricky case of individuals’ preferences," MPRA Paper 44534, University Library of Munich, Germany.
    6. Milstein, Ricarda & Schreyögg, Jonas, 2022. "Activity-based funding based on diagnosis-related groups: The end of an era? A review of payment reforms in the inpatient sector in ten high-income countries," hche Research Papers 28, University of Hamburg, Hamburg Center for Health Economics (hche).
    7. Indra Kurniawan, Muhammad, 2021. "Has access to health insurance through the Indonesian social security system improved peoples understanding of health issues? Evidence from a national survey," Warwick-Monash Economics Student Papers 14, Warwick Monash Economics Student Papers.
    8. Kathrin Roll & Tom Stargardt & Jonas Schreyögg, 2012. "Effect of Type of Insurance and Income on Waiting Time for Outpatient Care," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(4), pages 609-632, October.
    9. Kifmann, Mathias & Roeder, Kerstin, 2011. "Premium subsidies and social insurance: Substitutes or complements?," hche Research Papers 2011/01, University of Hamburg, Hamburg Center for Health Economics (hche).
    10. Jan Brosse & Mathias Kifmann, 2013. "Competition in Health Insurance and Premium Regulation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(01), pages 21-26, April.
    11. Jan Brosse & Mathias Kifmann, 2013. "Competition in Health Insurance and Premium Regulation," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 11(1), pages 21-26, 04.
    12. repec:ces:ifodic:v:11:y:2013:i:1:p:19083487 is not listed on IDEAS

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    More about this item

    Keywords

    social insurance; health insurance; redistributive taxation; equity;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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