Bonus systems in health insurance: a microeconomic analysis.
Faced with the cost explosion in the health care sector, policy-makers in most industrialized countries have been focusing on cost-sharing in health insurance as a possible solution. This is a sanction meted out to users of medical care; the alternative of creating positive incentives for non-users has not yet received nearly as much attention. This paper reports on the experiences made by German private health insurers with their plans offering rebates as well as experience-rated bonuses for no claims. It is argued that a rebate offer may be at least as attractive as conventional cost-sharing plans from the point of view of the consumer since these new options allow him to choose the time at which he is to bear the financial consequences of an illness. In the second part of the paper, predictions are derived concerning the incentives contained in the policies written by three particular insurers. Clear evidence of a decrease in demand for ambulatory medical care at the lower end of the billings distribution is found in rebate and bonus plans. The concluding section of the paper contains a discussion of the results with a view on the continuing debate about the reform of social health insurance.
D003256:Community Participation / Q000191:economics*; D003363:Cost Control / Q000379:methods; D003669:Deductibles and Coinsurance; D005249:Fees and Charges; D005860:Germany, West; D007348:Insurance, Health / Q000191:economics*; D008962:Models, Theoretical; D012306:Risk