Abstract
This study estimates the determinants of having employment-based private health insurance (EPHI) based on data from a survey of the Danish workforce conducted in 2009. The study contributes to the literature by exploring the role of satisfaction with the tax-financed health care system as a potential determinant of EPHI ownership and by taking into account that some employees receive EPHI free of charge, while others pay the premium out of their pre-tax income and thus make an actual choice. The results indicate that the probability of having EPHI is positively affected by private sector employment, size of the workplace, whether the workplace has a health scheme, income, being employed as a white-collar worker, and age until the age of 49, while the presence of subordinates, gender, education level, membership of 'denmark' and living in the capital region are not significantly associated with EPHI coverage. As expected, the characteristics related to the workplace are by far the quantitatively most important determinants. The association between EPHI and self-assessed health is found to be quadratic such that individuals in good self-assessed health are more likely to be covered by EPHI than those in excellent and fair, poor or very poor self-assessed health, respectively. Finally, the probability of having EPHI is found to be negatively related to the level of satisfaction with the tax-financed health care system. The findings of the study are not affected notably by distinguishing empirically between employees who receive EPHI free of charge and those who pay the premium out of their pre-tax income. Link to Appendix
Highlights
In several European countries with universal tax-financed health care systems, such as the United Kingdom, Spain, and the Scandinavian countries, considerable parts of the populations have private health insurance that covers treatment at private facilities (Aarbu, 2010; Mossialos and Thomson, 2002)
Due to the finding of the bivariate probit model that the determinants of employment-based private health insurance (EPHI) which is paid for out of the pre-tax income of the employee do not differ significantly from the determinants of having EPHI altogether, the determinants of EPHI coverage are discussed jointly for individuals who receive fully employer paid EPHI and those who have the premium deducted from their pre-tax income in the following
The positive association between EPHI ownership and working for an employer with a company health scheme in place suggests that both benefits are offered by employers who focus on the health of their employees and play an active part in promoting this
Summary
In several European countries with universal tax-financed health care systems, such as the United Kingdom, Spain, and the Scandinavian countries, considerable parts of the populations have private health insurance that covers treatment at private facilities (Aarbu, 2010; Mossialos and Thomson, 2002). Private health insurance that covers treatment at private facilities for treatment that is available free of charge at public hospitals may be classified as duplicate vis-a-vis the universal system. Duplicate private health insurance may be thought of as accommodating differences in preferences, and it allows for greater freedom of choice than would be feasible in a purely tax-financed system with only public hospitals. It may relieve the pressure on the public system and reduce the waiting times for treatment at public facilities, which in turn may decrease sickness absence to the extent that this is associated with waiting time for treatment. In the longer run, increasing reliance on private health insurance may bring about reduced support for the universal health care system, thereby possibly worsening the access to health care for the individuals who rely exclusively on this
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