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Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model

Nicolas, AL; Vera-Hernandez, M; (2008) Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model. J HEALTH ECON , 27 (5) 1285 - 1298. 10.1016/j.jhealeco.2008.06.006.

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Abstract

This paper develops an empirical strategy to estimate whether subsidies to private medical insurance are self-financing in countries where public and private insurance coexist and the latter covers the same treatments as the former. We construct a simulation routine based on a micro-econometric discrete choice model that allows us to evaluate the impact of premium changes on the utilization of outpatient and inpatient health care Services. As an application, we estimate the budgetary effects Of Scrapping a subsidy from the purchase of individual private policies, using micro-data from Catalonia. Our results suggest that the subsidy is not self-financing. This result is driven by the fact that private medical insurance holders make concurrent use of public and private services, and by the price inelasticity of the demand for private policies. (c) 2008 Elsevier B.V. All rights reserved.

Type: Article
Title: Are tax subsidies for private medical insurance self-financing? Evidence from a microsimulation model
DOI: 10.1016/j.jhealeco.2008.06.006
Keywords: private medical insurance, health care utilization, structural modeling, tax reform evaluation, HEALTH-INSURANCE, PUBLIC PROVISION, COUNT DATA, DEMAND, CARE, UK, INCENTIVES, ENGLAND, CHOICE, MARKET
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: http://discovery.ucl.ac.uk/id/eprint/17389
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