Income and wealth as determinants of voluntary private health insurance: empirical evidence in Spain, 2008\u20132014

Jaime Pinilla,Beatriz G López-Valcárcel

doi:10.1186/s12889-020-09362-5

Abstract

BackgroundFew studies have quantitatively estimated the income elasticity of demand of voluntary private health insurance (VPHI) in countries with a universal National Health Service. Most studies to date have uses cross-sectional data.MethodsIn this paper we used a longitudinal database from the Bank of Spain to analyse the financial behaviour of approximately six thousand families per wave. We used three waves (2008, 2011 and 2014). We estimated income and wealth semi-elasticities of VPHI in Spain considering personal and family characteristics (age, sex, level of health, education, composition of the household), i.e. changes in the probability of buying VPHI as result of 1% change in income or wealth. We estimated cross-sectional models for each wave and longitudinal models for families remaining for at least two waves, taking account of possible selection bias due to attrition.ResultsCross-sectional models suggest that the income effect on the probability of buying a VPHI increased from 2008 to 2014. The positive impact was observed for, wealth. In 2008 a 1% increase in income is associated with an increase in the probability of having VPHI of 0.064 [95%-CI: 0.023; 0.104] - on the probability scale (0.1) – whereas in 2014, this effect is of 0.116 [95%-CI, 0.094; 0.139]. In 2011 and 2014 the wealth effect is not significant at 5%. The estimation of the longitudinal model leads to different results where both, income and wealth are associated with non- significant results.ConclusionOur three main conclusions are: 1) Cross-sectional estimates of semi-elasticities of VPHI might be biased upwards; 2) Wealth is alongside income are economic determinants, of the decision to buy VPHI in high-income countries; 3) The effects of income and wealth on the probability of buying VHPI are neither linear nor log-linear. There are no significant differences among 60% of the most disadvantaged families, while the families of the two upper wealth quintiles show clearly differentiated behaviour with a higher probability of insurance.

Highlights

Few studies have quantitatively estimated the income elasticity of demand of voluntary private health insurance (VPHI) in countries with a universal National Health Service
The decrease in income was due to unemployment, the general reduction of wages in the public sector in 2011 and the internal deflation through wages in the private sector
The same applies for the frequency of VPHI

Summary

Introduction

Few studies have quantitatively estimated the income elasticity of demand of voluntary private health insurance (VPHI) in countries with a universal National Health Service. Health care systems are commonly categorized according to three systems: a national health service (NHS) system, a social insurance system, and a private insurance system. Kingdom and Spain are the most common examples of NHS systems, Germany has a social insurance system, and the United States (US) is an example of a country with a private insurance system [1]. VPHI has had, for many years, an important role in the health sector in low- and middleincome countries, it has traditionally been of minor importance in high-income countries with a universal public NHS and a welfare state. US is high income country with high importance of health insurances, but it has no universal public NHS

Methods

Results

Conclusion