Premium subsidies and social insurance: Substitutes or complements?

Mathias Kifmann () and Kerstin Roeder ()

No 2011/01, hche Research Papers from University of Hamburg, Hamburg Center for Health Economics (hche)

Abstract: Premium subsidies have been advocated as an alternative to social health insurance. These subsidies are paid if expenditure on health insurance exceeds a given share of income. In this paper, we examine whether this approach is superior to social insurance from a welfare perspective. We show that the results crucially depend on the correlation of health and productivity. For a positive correlation, we find that combining premium subsidies with social insurance is the optimal policy.

Keywords: social insurance; health insurance; redistributive taxation; equity (search for similar items in EconPapers)
JEL-codes: H21 H51 I18 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hcherp:201101

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