Accuracy of self-reported private health insurance coverage

Nguyen, Ha Trong and Le, Huong Thu and Connelly, Luke B. and Mitrou, Francis (2022): Accuracy of self-reported private health insurance coverage.

Abstract

Studies on health insurance coverage often rely on measures self-reported by respondents, but the accuracy of such measures has not been thoroughly validated. This paper is the first to use linked Australian National Health Survey and administrative population tax data to explore the accuracy of self-reported private health insurance (PHI) coverage in survey data. We find that 9% of individuals misreport their PHI coverage status, with 5% of true PHI holders reporting that they are uninsured and 16% of true non-insured persons self-identifying as insured. Our results show reporting errors are systematically correlated with individual and household characteristics. Our evidence on the determinants of errors is supportive of common reasons for misreporting. We directly investigate biases in the determinants of PHI enrolment using survey data. We find that, as compared to administrative data, survey data depict a quantitatively different picture of PHI enrolment determinants, especially those capturing age, language proficiency, labour force status or the number of children. We also show that PHI coverage misreporting is subsequently associated with misreporting of reasons for purchasing PHI, type of cover and length of cover.

• Item Type: MPRA Paper
• Language: English
• Keywords: Health Insurance; Measurement Error; Administrative Data; Survey Misreporting; Linked Data; Australia
• Subjects: C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs; C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology ; Computer Programs > C81 - Methodology for Collecting, Estimating, and Organizing Microeconomic Data ; Data Access; I - Health, Education, and Welfare > I1 - Health; I - Health, Education, and Welfare > I1 - Health > I13 - Health Insurance, Public and Private

References

Abowd, J.M., Stinson, M.H., 2013. Estimating Measurement Error in Annual Job Earnings: A Comparison of Survey and Administrative Data. The Review of Economics and Statistics 95, 1451-1467

ABS, 2017a. Health Service Usage and Health Related Actions, Australia, 2014-15. Australian Bureau of Statistics (Ed.), Canberra

ABS, 2017b. National Health Survey 2014-15 Questionnaire. Australian Bureau of Statistics (ABS) (Ed.), Canberra

ABS, 2017c. National Health Survey: Users' Guide, 2014-15. Australian Bureau of Statistics (ABS) (Ed.), Canberra

ABS, 2020a. Integration of the 2017-18 National Health Survey and the Personal Linkage Spine. Australian Bureau of Statistics (ABS) (Ed.), Canberra

ABS, 2020b. Integration of the National Health Survey with the Multi-Agency Data Integration Project. Australian Bureau of Statistics (ABS) (Ed.), Canberra

AIHW, 2017. Private health insurance use in Australian hospitals, 2006–07 to 2015–16 Australian hospital statistics. Australian Institute of Health and Welfare (AIHW) (Ed.), Canberra

Baker, M., Stabile, M., Deri, C., 2004. What do self-reported, objective, measures of health measure? Journal of human Resources 39, 1067-1093

Battistin, E., De Nadai, M., Sianesi, B., 2014. Misreported schooling, multiple measures and returns to educational qualifications. Journal of Econometrics 181, 136-150

Besley, T., Hall, J., Preston, I., 1999. The demand for private health insurance: do waiting lists matter? Journal of Public Economics 72, 155-181

Bilgrami, A., Cutler, H., Sinha, K., Cheng, Z., 2021. The Impact of Means-Tested Premium Rebates and Tax Penalties on the Demand for Private Hospital Cover in Australia. Economic Record 97, 170-211

Bingley, P., Martinello, A., 2017. Measurement Error in Income and Schooling and the Bias of Linear Estimators. Journal of Labor Economics 35, 1117-1148

Bonsang, E., Costa-Font, J., 2022. Buying control? ‘Locus of control’ and the uptake of supplementary health insurance. Journal of Economic Behavior & Organization 204, 476-489

Boudreaux, M.H., Call, K.T., Turner, J., Fried, B., O'Hara, B., 2015. Measurement Error in Public Health Insurance Reporting in the American Community Survey: Evidence from Record Linkage. Health Services Research 50, 1973-1995

Bound, J., Brown, C., Mathiowetz, N., 2001. Measurement error in survey data. In: Heckman JJ & Leamer E (eds.) Handbook of econometrics. Elsevier, pp. 3705-3843.

Buchmueller, T.C., Cheng, T.C., Pham, N.T.A., Staub, K.E., 2021. The effect of income-based mandates on the demand for private hospital insurance and its dynamics. Journal of Health Economics 75, 102403

Buchmueller, T.C., Fiebig, D.G., Jones, G., Savage, E., 2013. Preference heterogeneity and selection in private health insurance: The case of Australia. Journal of Health Economics 32, 757-767

Burkhauser, R.V., Cawley, J., 2008. Beyond BMI: the value of more accurate measures of fatness and obesity in social science research. Journal Of Health Economics 27, 519-529

Call, K.T., Davern, M.E., Klerman, J.A., Lynch, V., 2013. Comparing Errors in Medicaid Reporting across Surveys: Evidence to Date. Health Services Research 48, 652-664

Call, K.T., Davidson, G., Davern, M., Brown, E.R., Kincheloe, J., Nelson, J.G., 2008. Accuracy in Self-Reported Health Insurance Coverage among Medicaid Enrollees. Inquiry: The Journal of Health Care Organization, Provision, and Financing 45, 438-456

Call, K.T., Fertig, A.R., Pascale, J., 2022. Factors associated with accurate reporting of public and private health insurance type. Health Services Research 57, 930-943

Cameron, A.C., Trivedi, P.K., 1991. The role of income and health risk in the choice of health insurance: Evidence from Australia. Journal of Public Economics 45, 1-28

Cameron, A.C., Trivedi, P.K., Milne, F., Piggott, J., 1988. A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia. The Review of Economic Studies 55, 85-106

Cantor, J.C., Monheit, A.C., Brownlee, S., Schneider, C., 2007. The adequacy of household survey data for evaluating the nongroup health insurance market. Health Services Research 42, 1739-57

Cawley, J., Maclean, J.C., Hammer, M., Wintfeld, N., 2015. Reporting error in weight and its implications for bias in economic models. Economics & Human Biology 19, 27-44

Cheng, T.C., 2014. Measuring the effects of reducing subsidies for private insurance on public expenditure for health care. Journal of Health Economics 33, 159-179

Colombo, F., Tapay, N., 2004. Private Health Insurance in OECD Countries: The Benefits and Costs for Individuals and Health Systems. Organization for Economic Cooperation Development (OECD) Working Paper No. 15

Deary, I.J., Corley, J., Gow, A.J., Harris, S.E., Houlihan, L.M., Marioni, R.E., Penke, L., Rafnsson, S.B., Starr, J.M., 2009. Age-associated cognitive decline. British Medical Bulletin 92, 135-152

Doiron, D., Fiebig, D.G., Suziedelyte, A., 2014. Hips and hearts: The variation in incentive effects of insurance across hospital procedures. Journal of Health Economics 37, 81-97

Doiron, D., Jones, G., Savage, E., 2008. Healthy, wealthy and insured? The role of self-assessed health in the demand for private health insurance. Health Economics 17, 317-334

Doiron, D., Kettlewell, N., 2020. Family formation and the demand for health insurance. Health Economics 29, 523-533

Erlangga, D., Suhrcke, M., Ali, S., Bloor, K., 2019. The impact of public health insurance on health care utilisation, financial protection and health status in low-and middle-income countries: A systematic review. PloS one 14, e0219731

Feng, S., Hu, Y., 2013. Misclassification errors and the underestimation of the US unemployment rate. American Economic Review 103, 1054-70

Frean, M., Gruber, J., Sommers, B.D., 2017. Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act. Journal of Health Economics 53, 72-86

Hartshorne, J.K., Germine, L.T., 2015. When Does Cognitive Functioning Peak? The Asynchronous Rise and Fall of Different Cognitive Abilities Across the Life Span. Psychological Science 26, 433-443

Hullegie, P., Klein, T.J., 2010. The effect of private health insurance on medical care utilization and self-assessed health in Germany. Health Economics 19, 1048-1062

Hurst, E., Li, G., Pugsley, B., 2014. Are household surveys like tax forms? Evidence from income underreporting of the self-employed. Review of economics and statistics 96, 19-33

Johar, M., Jones, G., Keane, M., Savage, E., Stavrunova, O., 2011. Waiting times for elective surgery and the decision to buy private health insurance. Health Economics 20, 68-86

Johar, M., Savage, E., 2012. Sources of advantageous selection: Evidence using actual health expenditure risk. Economics Letters 116, 579-582

Kapteyn, A., Ypma, J.Y., 2007. Measurement Error and Misclassification: A Comparison of Survey and Administrative Data. Journal of Labor Economics 25, 513-551

Kettlewell, N., 2019a. Risk preference dynamics around life events. Journal of Economic Behavior & Organization 162, 66-84

Kettlewell, N., 2019b. Utilization and Selection in an Ancillaries Health Insurance Market. Journal of Risk and Insurance 86, 989-1017

Kettlewell, N., Stavrunova, O., Yerokhin, O., 2018. Premium subsidies and demand for private health insurance: results from a regression discontinuity design. Applied Economics Letters 25, 96-101

Kettlewell, N., Zhang, Y., 2021. Age penalties and take-up of private health insurance. Melbourne Institute Applied Economic & Social Research Working Paper No. 28/21

Liu, J., Zhang, Y., 2022. Elderly responses to private health insurance incentives: evidence from Australia. Melbourne Institute Working Paper No. 8/22

Lurie, I.Z., Pearce, J., 2021. Health Insurance Coverage in Tax and Survey Data. American Journal of Health Economics 7, 164-184

McGuire, T.G., 2011. Chapter Five - Demand for Health Insurance. In: Mark V. Pauly TGM & Pedro PB (eds.) Handbook of Health Economics. Elsevier, pp. 317-396.

Meyer, B.D., Mittag, N., 2019. Misreporting of Government Transfers: How Important Are Survey Design and Geography? Southern Economic Journal 86, 230-253

Meyer, B.D., Mittag, N., Goerge, R.M., 2022. Errors in Survey Reporting and Imputation and Their Effects on Estimates of Food Stamp Program Participation. Journal of Human Resources 57, 1605-1644

Meyer, B.D., Mok, W.K., Sullivan, J.X., 2009. The under-reporting of transfers in household surveys: its nature and consequences. NBER Working Paper No 15181

Meyer, B.D., Mok, W.K.C., Sullivan, J.X., 2015. Household Surveys in Crisis. Journal of Economic Perspectives 29, 199-226

Nguyen, H.T., Le, H.T., Connelly, L.B., 2021. Who's declining the “free lunch”? New evidence from the uptake of public child dental benefits. Health Economics 30, 270-288

Nguyen, T.-H., Leung, S., 2013. Dynamics of health insurance enrollment in Vietnam, 2004–2006. Journal of the Asia Pacific Economy 18, 594-614

Noon, J.M., Fernandez, L.E., Porter, S.R., 2019. Response error and the Medicaid undercount in the current population survey. Health Services Research 54, 34-43

Palangkaraya, A., Yong, J., 2005. Effects of Recent Carrot-and-Stick Policy Initiatives on Private Health Insurance Coverage in Australia*. Economic Record 81, 262-272

Pascale, J., Fertig, A., Call, K., 2019a. Validation of Two Federal Health Insurance Survey Modules After Affordable Care Act Implementation. Journal of Official Statistics 35, 409-460

Pascale, J., Fertig, A.R., Call, K.T., 2019b. Assessing the accuracy of survey reports of health insurance coverage using enrollment data. Health Services Research 54, 1099-1109

Pascale, J., Roemer, M.I., Resnick, D.M., 2009. Medicaid Underreporting in the CPS: Results from a Record Check Study. Public Opinion Quarterly 73, 497-520

Propper, C., Rees, H., Green, K., 2001. The Demand for Private Medical Insurance in the UK: A Cohort Analysis. The Economic Journal 111, C180-C200

Savage, E., Wright, D.J., 2003. Moral hazard and adverse selection in Australian private hospitals: 1989-1990. Journal of Health Economics 22, 331-359

Solon, G., Haider, S.J., Wooldridge, J.M., 2015. What Are We Weighting For? Journal of Human Resources 50, 301-316

Spaan, E., Mathijssen, J., Tromp, N., McBain, F., ten Have, A., Baltussen, R., 2012. The impact of health insurance in Africa and Asia: a systematic review. Bull World Health Organ 90, 685-92

Stavrunova, O., Yerokhin, O., 2014. Tax incentives and the demand for private health insurance. Journal of Health Economics 34, 121-130

Sudman, S., Bradburn, N.M., Schwarz, N., 1996. Thinking about answers: The application of cognitive processes to survey methodology. Jossey-Bass, San Francisco, CA, US.

Zhang, Y., Prakash, K., 2021. Why do Australians buy private hospital insurance? Melbourne Institute Research Insight No. 06/21