title: Public versus private: evidence on health insurance selection.
abstract: This paper models health insurance choice in Chile (public versus private) as a dynamic, stochastic process, where individuals consider premiums, expected out-of pocket costs, personal characteristics and preferences. Insurance amenities and restrictions against pre-existing conditions among private insurers introduce asymmetry to the model. We confirm that the public system services a less healthy and wealthy population (adverse selection for public insurance). Simulation of choices over time predicts a slight crowding out of private insurance only for the most pessimistic scenario in terms of population aging and the evolution of education. Eliminating the restrictions on pre-existing conditions would slightly ameliorate the level (but not the trend) of the disproportionate accumulation of less healthy individuals in the public insurance program over time.
authors.affiliation: Department of Economics, Saint Joseph's University, Philadelphia, PA 19131, USA. cpardo@sju.edu
authors.forename: Cristian
authors.initials: C
authors.lastname: Pardo
authors.forename: Whitney
authors.initials: W
authors.lastname: Schott
mesh_terms: D000328:Adult; D000368:Aged; D002677:Chile; D002755:Choice Behavior; D005260:Female; D006801:Humans; D007348:Insurance, Health; D008297:Male; D008875:Middle Aged; D008962:Models, Theoretical; D017149:Private Sector; D011634:Public Health; D017150:Public Sector; D013269:Stochastic Processes