Minchung, Hsu and Junsang, Lee (2011): The provision of public universal health insurance: impacts on private insurance, asset holdings and welfare.
Download (3MB) | Preview
This paper aims to investigate impacts of public provision of universal health insurance (UHI) in an environment with household heterogeneity and financial market incompleteness. Various UHI polices with both distortionary (payroll-tax) and non-distortionary (lump-sum tax) financing methods are compared to address the trade-off between risk reduction and tax distortion as well as corresponding welfare implications. We undertake a dynamic equilibrium model with endogenous insurance choice and labor supply decisions to perform quantitative analyses. The results suggest that the UHI expenditure coverage rate would be too high in most OECD countries when the distortion effect is considered. We find a clear crowding out effect on asset holdings. Implications for private health insurance (PHI) purchases when UHI is introduced depend on the pricing and the design of coverage. We find the rich are sensitive to the price of PHI, and would prefer a supplemental plan when UHI is introduced.
|Item Type:||MPRA Paper|
|Original Title:||The provision of public universal health insurance: impacts on private insurance, asset holdings and welfare|
|Keywords:||universal health insurance, complementary/supplemental health insurance|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health
|Depositing User:||Hsu Minchung|
|Date Deposited:||25. Aug 2011 12:13|
|Last Modified:||16. Feb 2013 03:48|
Attanasio, Orazio, Sagiri Kitao and Gianluca L. Violante (2010). ``Financing Medicare: A General Equilibrium Analysis,'' Chapter in Demography and the Economy, edited by John Shoven, University of Chicago Press, 2010.
Aiyagari, S. Rao (1994). ``Optimal Capital Income Taxation with Incomplete Markets, Borrowing Constraints and Constant Discounting.'' Journal of Political Economy.
Aiyagari, S. Rao and McGrattan, Ellen R. (1998). ``The optimum quantity of debt.'' Journal of Monetary Economics 42(3), 447--469
Colombo, Francesca and Nicole Tapay (2004). ``Private Health Insurance in OECD Countries: The Benefits and Costs for Individuals and Health Systems.'' OECD Health working papers no. 15.
Domeij, David and Jonathan Heathcote (2004). ``On the distributional Effects of Reducing Capital Taxes.'' International Economic Review.
Hansen, G. and A. Imrohoroglu (1992). ``The Role of Unemployment Insurance in an Economy with Liquidity Constraints and Moral Hazard.'' Journal of Political Economy.
Heathcote, J. (2005). ``Fiscal Policy with Heterogeneous Agents and Incomplete Markets.'' Review of Economics Studies 72, 161--188.
Nishiyama, . and K. Smetters (2005). ``Consumption Taxes and Economic Efficiency with Idiosyncratic Wage Shocks.'' Journal of Political Economy 113(5), 1088--1115.
Huggett, M. and G. Ventura (1999). ``On the Distributional Effects of Social Security Reform.'' Review of Economic Dynamics 2, 498--531.
Jeske, K. and S. Kitao (2009). ``U.S. tax policy and health insurance demand: Can a regressive policy improve welfare?'' Journal of Monetary Economics 56, 210--221.
Hubbard, R. G., J. Skinner and S. P. Zeldes (1995). ``Precautionary saving and social insurance.'' Journal of Political Economy 103, 360--399.
Laschober, M. A. , M. Kitchman, P. Neuman and A. A. Strabic (2002). ``Trends In Medicare Supplemental Insurance And Prescription Drug Coverage, 1996-1999.'' Health Affairs, no. (2002): doi: 10.1377/hlthaff.w2.127
Storesletten, K., C. Telmer and A. Yaron (1999). ``The risk sharing implications of alternative social security arrangements.'' Carnegie-Rochester Conference Series on Public Policy 50, 213-259.