Social Health Insurance: A Quantitative Exploration

Juergen Jung and Chung Tran

No 690, 2019 Meeting Papers from Society for Economic Dynamics

Abstract: We quantitatively explore the welfare benefits of health insurance over the lifecycle in a dynamic general equilibrium model with health risk and a health care sector. We consider three distinct approaches to designing a health insurance system: (i) a mixed private and public health insurance system similar to the US system, (ii) private health insurance (PHI), and (iii) universal public health insurance (UPHI). Our results indicate that the introduction of the US system into an economy without any health insurance results in large welfare gains, but does not produce the best welfare outcome. The PHI system with some government regulation on premiums is viable and produces welfare gains comparable to the welfare gains generated by the US system. The UPHI system with a high enough coinsurance rate produces better overall welfare outcomes than the other two systems. There exists an optional coinsurance rate that maximizes the welfare benefits of the UPHI system. A structural reform that replaces the US system with the UPHI system—i.e., Medicare for all—is welfare improving, but would face political headwinds due to opposing welfare effects across income groups.

Date: 2019
New Economics Papers: this item is included in nep-dge, nep-hea and nep-ias
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Social health insurance: A quantitative exploration (2022)
Working Paper: Social Health Insurance: A Quantitative Exploration (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:690

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