Title

Medical Care Use And Selection In A Social Health Insurance With An Equalization Fund: Evidence From Colombia

Keywords

Capitation; Cream skimming; Sickness fund; Trivariate probit

Abstract

This paper studies the relationship between health status and insurance participation, and between insurance status and medical use in the context of a social health insurance with an equalization fund (SHIEF). Under this system, revenues from a mandatory payroll tax are collected into a single pool (equalization fund) that reimburses for-profit insurance companies according to a capitated formula. Although competition should induce insurers to control costs without reducing the quality of service necessary to attract consumers, limitations in the capitation formula might induce insurers to select against bad risks, and limitations in the contribution system might induce more healthy individuals to evade enrollment. A three-equation model having social health insurance, private health insurance, and using medical services is estimated using a 1997 Colombian household survey. Consistent with similar studies, participation in SHIEF increases medical care use. On the other hand, the evidence on selection is somewhat mixed: individuals who report good health status are more likely to participate in SHIEF, while those without a chronic condition are less likely to participate in SHIEF. Copyright © 2002 John Wiley & Sons, Ltd.

Publication Date

3-1-2003

Publication Title

Health Economics

Volume

12

Issue

3

Number of Pages

231-246

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1002/hec.711

Socpus ID

0037338950 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/0037338950

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