Voluntary private health insurance demand determinants and risk preferences: Evidence from SHARE

Abstract

The demand for voluntary private health insurance (VPHI) in universal coverage health systems in Europe raises some questions. The aim of this paper is to determine the factors that explain the decision to purchase VPHI, to analyse the role of individual risk attitudes and self-assessed health (SAH) in purchasing VPHI, to explore the factors that explain individual risk preferences, and to test how SAH relates to those preferences. To achieve this aim, two recursive simultaneous probits are estimated using data collected by SHARE, wave 6. The main results indicate that people who are more satisfied with the health system coverage are more likely to buy VPHI; SAH is negative correlated with VPHI, but being a risk taker contributes to that decision; however, being a risk taker is positively influenced by good health status. This paper contributes to the discussion on the role of SAH and risk preferences in the decision to buy VPHI. It brings new insights for the health insurance companies and for health policy makers. Highlights• People who are more satisfied with the health system coverage are more likely to buy voluntary private health insurance.• The longer the planning horizon assumed by individuals, the greater the likelihood they are risk takers.• People reporting being risk takers are more likely to have taken out voluntary private health insurance.• Self-assessed health influences the decision to buy voluntary private health insurance in two ways: a direct one, where better

The Drivers of Voluntary Private Health Insurance Demand in European Countries

“…This is in line with the evidence that females are more risk averse and use more health care services in comparison to males (due to childbirth, as it is stated by Finn and Harmon, 2006). This is confirmed by Buchmueller et al (2004) for France and by Bolin et al (2010) and Tavares (2020) for the set of European countries. On the other hand, Wallis (2004) for Great Britain and King and Mossialos (2005) for England find that private health insurance is more prevalent among men.…”

“…The positive impact of living in larger cities on demand for VPHI is confirmed by empirical studies based on a dataset for Great Britain (Wallis, 2003), Ireland (Bolhaar et al, 2008) and Spain (Jofre-Bonet, 2000;Costa-Font and Garcia, 2002;Rodriguez and Stoyanova, 2008). The findings of Tavares (2020) for the set of European countries are the opposite. Precisely, while there is no significant relationship between living in an urban area and purchasing VPHI, living in a rural area increases the probability of buying voluntary private health insurance coverage.…”

“…The negative effect of unemployment is confirmed by the empirical literature (Jofre-Bonet, 2000;Buchmueller et al, 2004;Wallis, 2004;King and Mossialos, 2005). However, Tavares (2020) finds no significant relationship between unemployment and demand for VPHI in European countries.…”

“…Demographic determinants of VPHI most often encompass age, gender and urbanization. As individuals get older, the needs for health care services are increasing and there is more demand for insurance (Jofre-Bonet, 2000;Costa-Font and Garcia, 2003;Buchmueller et al, 2004;King and Mossialos, 2005;Finn and Harmon, 2006;Bolhaar et al, 2008;Doiron et al, 2008;Rodriguez and Stoyanova, 2008;Johar et al, 2010;Tavares, 2020). Besides the need for health care services, the positive impact of age could be related to accumulated wealth that increases with age (Finn and Harmon, 2006).…”

Primary health care policy and vision for community pharmacy and pharmacists in Portugal

“…surgery). 8 The health care workforce has been increasing, with 5.2 physicians, 7.2 nurses and 1.3 pharmacists per 1,000 inhabitants in 2018. 9…”