Does voluntary health insurance reduce the use of and the willingness to finance public health care in Sweden?

Abstract

Voluntary private health insurance (VHI) has generally been of limited importance in national health service-type health care systems, especially in the Nordic countries. During the last decades however, an increase in VHI uptake has taken place in the region. Critics of this development argue that voluntary health insurance can undermine support for public health care, while proponents contend that increased private funding for health services could relieve strained public health care systems. Using data from Sweden, this study investigates empirically how voluntary health insurance affects the public health care system. The results of the study indicate that the public Swedish health care system is fairly resilient to the impact of voluntary health insurance with regards to support for the tax-based funding. No difference between insurance holders and non-holders was found in willingness to finance public health care through taxes. A slight unburdening effect on public health care use was observed as VHI holders appeared to use public health care to a lesser extent than those without an insurance. However, a majority of the insurance holders continued to use the public health care system, indicating only a modest substitution effect.