TY - JOUR
T1 - The effect of health on acute care supplemental insurance ownership
T2 - An empirical analysis
AU - Shmueli, Amir
PY - 2001
Y1 - 2001
N2 - The empirical effect of health status on private insurance ownership is a mixture of the effect of health on the demand for insurance (subjected to adverse selection) and its effect on the insurer's underwriting practice (subjected to risk-selection). Using bivariate partial observability probit models, this paper provides an empirical identification of health effects on the probability of application and on the probability of rejection in the Israeli market for acute care supplemental health insurance. The analysis shows that while the reduced-form health effect on ownership is negligible, the structural effects are sizeable and indicate that sicker individuals are more likely to apply, but are also more likely to be rejected. The policy implications of the above findings are discussed in the context of the Israeli health system.
AB - The empirical effect of health status on private insurance ownership is a mixture of the effect of health on the demand for insurance (subjected to adverse selection) and its effect on the insurer's underwriting practice (subjected to risk-selection). Using bivariate partial observability probit models, this paper provides an empirical identification of health effects on the probability of application and on the probability of rejection in the Israeli market for acute care supplemental health insurance. The analysis shows that while the reduced-form health effect on ownership is negligible, the structural effects are sizeable and indicate that sicker individuals are more likely to apply, but are also more likely to be rejected. The policy implications of the above findings are discussed in the context of the Israeli health system.
KW - Adverse selection
KW - Health effect
KW - Risk-selection
KW - Supplemental health insurance
UR - http://www.scopus.com/inward/record.url?scp=0034962354&partnerID=8YFLogxK
U2 - 10.1002/hec.616
DO - 10.1002/hec.616
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C2 - 11400256
AN - SCOPUS:0034962354
SN - 1057-9230
VL - 10
SP - 341
EP - 350
JO - Health Economics (United Kingdom)
JF - Health Economics (United Kingdom)
IS - 4
ER -