The Value of Fixed-Reimbursement Healthcare Insurance- Evidence from Cancer Patients in Ontario, Canada

Christopher Longo () and Michel Grignon ()
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Christopher Longo: Health Services Management, DeGroote School of Business, Centre for Health Economics and Policy Analysis, McMaster University

No 2009-03, Centre for Health Economics and Policy Analysis Working Paper Series from Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada

Abstract: Critical illness insurance (CII) is a fixed-reimbursement scheme conditioned on the event of a loss, not the size of the loss. We investigate demand for CII. Consumers will be willing to purchase CII depending on their degree of risk aversion to the cost of treating illness, their forgone income, and desire for being compensated for utility loss when sick. Using a theoretical model based on Eeckhoudt (2003), we run simulations using Canadian data for CII policy reimbursement dollar values of purchases, family income, cancer expenditure, and net wealth. We then evaluate how well these models predict actual CII purchases.

Keywords: health insurance; healthcare insurance; fixed-reimbursement insurance; state-utility transfer; expected utility; cancer (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-hea and nep-ias
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