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The health insurance puzzle in Europe: the role of information

Avitabile, C.; (2009) The health insurance puzzle in Europe: the role of information. (CSEF Working Papers 221). Centre for Studies in Economics and Finance (CSEF), Department of Economics, University of Naples Federico II: Naples, Italy. Green open access

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I use microdata from the Survey of Health, Ageing and Retirement in Europe to study whether the cost of acquiring health information is an important determinant of the decision to buy private hospital health insurance for individuals aged 50+, in eight European countries. I first test whether, conditional on health insurance companies' risk assessments, individuals have residual private information on insurance determinants other than their risk type. My results show that there are individual characteristics, not observed by the insurers, that are positively correlated with hospital insurance coverage and negatively correlated with the ex post probability of requiring hospital treatment. However, this opposite association is significantly different from zero only in countries with low quality healthcare systems. I then provide evidence that education and cognitive ability act as substitutes for quality of health promotion in determining the propensity to take out a voluntary private hospital insurance.

Type: Working / discussion paper
Title: The health insurance puzzle in Europe: the role of information
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.csef.it/wpcsef.htm
Language: English
Keywords: Health insurance, cognitive ability, healthcare quality
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/18804
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