Introduction
Health insurance in the Netherlands
The institutional setting before the reforms
-
Offer a basic insurance policy, the coverage of which is determined by the government;
-
contract with every hospital;
-
take part in the risk-equalisation scheme run by the government;
-
accept every citizen at the same nominal premium (community rating) for basic insurance, irrespective of expected health costs, during annual open enrolment periods.
Basic insurance and supplementary insurance: tied sales?
The post-reform setting
Literature review
Author | Period | Elasticity |
---|---|---|
A. The Netherlands | ||
Schut and Hassink (2002) basic Insurance | 1996–1998 | −0.3 |
Schut and Hassink (2002) supplementary insurance | 1996–1998 | −0.8 |
Schut and Hassink (2002) basic + supplementary insurance | 1996–1998 | −0.4 |
1996–2000 | 0.0–0.4 | |
B. Germany | ||
1996–2000 | 0.4–5.3 | |
C. US | ||
1995 | −0.2–1.7 | |
1994–1995 | −0.1–1.5 |
Data and method
The dependent variable
Starting point: individual cross-section data
Transforming cross-section data into paneldata
-
All individuals in our dataset have been insured by a sickness fund uninterruptedly during the whole period 1993–2002 (not necessarily the same sickness fund).
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No individual in our dataset has moved between regions during the period 1993–2002.
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Individuals have switched at most once during the period 1993–2002.
Age in 2002 | |||||
---|---|---|---|---|---|
25–34 | 35–44 | 45–54 | 55–64 | Row total | |
Women | |||||
Number of obs | 605863 | 458189 | 297572 | 169258 | 1530882 |
Number of switchers | 140638 | 74711 | 40014 | 20400 | 275763 |
Percentage of switchers | 23.2 | 16.3 | 13.4 | 12.1 | 16.3 |
Men | |||||
Number of obs | 585885 | 511814 | 367300 | 140393 | 1605392 |
Number of switchers | 160247 | 114771 | 77702 | 24418 | 377138 |
Percentage of switchers | 27.4 | 22.4 | 21.2 | 17.4 | 22.1 |
Total | |||||
Number of obs | 1191748 | 970003 | 664872 | 309651 | 3136274 |
Number of switchers | 300885 | 189482 | 117716 | 44818 | 652901 |
Percentage of switchers | 25.3 | 19.4 | 17.3 | 14.7 | 19.2 |
From individual data to bilateral flows
Age | ||||
---|---|---|---|---|
25–34 | 35–44 | 45–54 | 55–64 | |
Women | ||||
Mean | 1.3 | 0.9 | 0.8 | 0.7 |
SD | 2.1 | 1.7 | 1.5 | 1.4 |
Men | ||||
Mean | 1.5 | 1.3 | 1.2 | 1.0 |
SD | 2.4 | 2.1 | 2.1 | 1.8 |
Explanatory variables
Prices
To firm | From firm | |||
---|---|---|---|---|
1 | 2 | … | 15 | |
1 | – | p1–p2 | p1–p… | p1–p15 |
2 | p2–p1 | – | p2–p… | p2–p15 |
… | p…–p1 | p…–p2 | – | p…–p15 |
20 | p20–p1 | p20–p2 | p20–p… | – |
127.3 | 137.0 | 139.2 | 139.9 | 140.8 | 141.4 | 143.2 | 145.6 | 148.7 | 149.0 | 153.1 | 156.6 | 157.5 | 157.9 | 158.5 | 159.3 | 164.3 | 164.6 | 176.9 | 178.3 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Basic insurance | ||||||||||||||||||||
127.3 | ||||||||||||||||||||
137.0 | 9.7 | |||||||||||||||||||
139.2 | 12.0 | 2.2 | ||||||||||||||||||
139.9 | 12.6 | 2.9 | 0.6 | |||||||||||||||||
140.8 | 13.6 | 3.9 | 1.6 | 1.0 | ||||||||||||||||
141.4 | 14.2 | 4.4 | 2.2 | 1.6 | 0.6 | |||||||||||||||
143.2 | 16.0 | 6.2 | 4.0 | 3.4 | 2.4 | 1.8 | ||||||||||||||
145.6 | 18.3 | 8.6 | 6.4 | 5.7 | 4.7 | 4.2 | 2.4 | |||||||||||||
148.7 | 21.4 | 11.7 | 9.5 | 8.8 | 7.8 | 7.3 | 5.5 | 3.1 | ||||||||||||
149.0 | 21.8 | 12.1 | 9.8 | 9.2 | 8.2 | 7.6 | 5.8 | 3.4 | 0.3 | |||||||||||
153.1 | 25.8 | 16.1 | 13.9 | 13.2 | 12.3 | 11.7 | 9.9 | 7.5 | 4.4 | 4.1 | ||||||||||
156.6 | 29.3 | 19.6 | 17.4 | 16.7 | 15.8 | 15.2 | 13.4 | 11.0 | 7.9 | 7.6 | 3.5 | |||||||||
157.5 | 30.2 | 20.5 | 18.3 | 17.6 | 16.6 | 16.1 | 14.3 | 11.9 | 8.8 | 8.5 | 4.4 | 0.9 | ||||||||
157.9 | 30.6 | 20.9 | 18.7 | 18.0 | 17.0 | 16.5 | 14.7 | 12.3 | 9.2 | 8.9 | 4.8 | 1.3 | 0.4 | |||||||
158.5 | 31.2 | 21.5 | 19.3 | 18.6 | 17.7 | 17.1 | 15.3 | 12.9 | 9.8 | 9.5 | 5.4 | 1.9 | 1.0 | 0.6 | ||||||
159.3 | 32.1 | 22.3 | 20.1 | 19.5 | 18.5 | 17.9 | 16.1 | 13.7 | 10.6 | 10.3 | 6.2 | 2.7 | 1.8 | 1.4 | 0.8 | |||||
164.3 | 37.0 | 27.3 | 25.1 | 24.4 | 23.4 | 22.9 | 21.1 | 18.7 | 15.6 | 15.3 | 11.2 | 7.7 | 6.8 | 6.4 | 5.8 | 5.0 | ||||
164.6 | 37.3 | 27.6 | 25.3 | 24.7 | 23.7 | 23.1 | 21.3 | 19.0 | 15.9 | 15.5 | 11.5 | 8.0 | 7.1 | 6.7 | 6.1 | 5.2 | 0.3 | |||
176.9 | 49.7 | 40.0 | 37.7 | 37.1 | 36.1 | 35.5 | 33.7 | 31.4 | 28.3 | 27.9 | 23.8 | 20.3 | 19.5 | 19.1 | 18.4 | 17.6 | 12.7 | 12.4 | ||
178.3 | 51.0 | 41.3 | 39.1 | 38.4 | 37.5 | 36.9 | 35.1 | 32.7 | 29.6 | 29.3 | 25.2 | 21.7 | 20.8 | 20.4 | 19.8 | 19.0 | 14.0 | 13.7 | 1.4 |
50.0 | 50.8 | 56.8 | 63.7 | 64.9 | 66.5 | 70.2 | 71.7 | 73.6 | 74.5 | 83.8 | 84.0 | 84.4 | 87.6 | 88.5 | 93.7 | 103. | 106. | 122.1 | 133.8 | |
Supplementary insurance | ||||||||||||||||||||
50.0 | ||||||||||||||||||||
50.8 | 0.9 | |||||||||||||||||||
56.8 | 6.9 | 6.0 | ||||||||||||||||||
63.7 | 13.8 | 12.9 | 6.9 | |||||||||||||||||
64.9 | 14.9 | 14.0 | 8.0 | 1.1 | ||||||||||||||||
66.5 | 16.5 | 15.6 | 9.6 | 2.7 | 1.6 | |||||||||||||||
70.2 | 20.2 | 19.4 | 13.4 | 6.5 | 5.3 | 3.7 | ||||||||||||||
71.7 | 21.8 | 20.9 | 14.9 | 8.0 | 6.9 | 5.3 | 1.5 | |||||||||||||
73.6 | 23.7 | 22.8 | 16.8 | 9.9 | 8.8 | 7.2 | 3.4 | 1.9 | ||||||||||||
74.5 | 24.5 | 23.7 | 17.6 | 10.8 | 9.6 | 8.0 | 4.3 | 2.8 | 0.8 | |||||||||||
83.8 | 33.9 | 33.0 | 27.0 | 20.1 | 19.0 | 17.4 | 13.6 | 12.1 | 10.2 | 9.3 | ||||||||||
84.0 | 34.0 | 33.2 | 27.2 | 20.3 | 19.2 | 17.6 | 13.8 | 12.3 | 10.4 | 9.5 | 0.2 | |||||||||
84.4 | 34.4 | 33.5 | 27.5 | 20.6 | 19.5 | 17.9 | 14.2 | 12.6 | 10.7 | 9.9 | 0.5 | 0.4 | ||||||||
87.6 | 37.6 | 36.8 | 30.8 | 23.9 | 22.7 | 21.1 | 17.4 | 15.9 | 14.0 | 13.1 | 3.8 | 3.6 | 3.2 | |||||||
88.5 | 38.5 | 37.7 | 31.6 | 24.8 | 23.6 | 22.0 | 18.3 | 16.8 | 14.8 | 14.0 | 4.7 | 4.5 | 4.1 | 0.9 | ||||||
93.7 | 43.7 | 42.9 | 36.9 | 30.0 | 28.8 | 27.2 | 23.5 | 22.0 | 20.1 | 19.2 | 9.9 | 9.7 | 9.3 | 6.1 | 5.2 | |||||
103.5 | 53.5 | 52.6 | 46.6 | 39.7 | 38.6 | 37.0 | 33.3 | 31.7 | 29.8 | 29.0 | 19.6 | 19.5 | 19.1 | 15.9 | 15.0 | 9.8 | ||||
106.4 | 56.4 | 55.6 | 49.6 | 42.7 | 41.6 | 40.0 | 36.2 | 34.7 | 32.8 | 31.9 | 22.6 | 22.4 | 22.0 | 18.8 | 17.9 | 12.7 | 2.9 | |||
122.1 | 72.1 | 71.3 | 65.3 | 58.4 | 57.2 | 55.6 | 51.9 | 50.4 | 48.5 | 47.6 | 38.3 | 38.1 | 37.7 | 34.5 | 33.6 | 28.4 | 18.6 | 15.7 | ||
133.8 | 83.8 | 82.9 | 76.9 | 70.0 | 68.9 | 67.3 | 63.6 | 62.0 | 60.1 | 59.3 | 49.9 | 49.8 | 49.4 | 46.2 | 45.3 | 40.1 | 30.3 | 27.4 | 11.7 |
Sickness fund | Basic insurance | Supplementary insurance | Total |
---|---|---|---|
1 | 148.7 | 50.8 | 199.5 |
2 | 145.6 | 56.8 | 202.4 |
3 | 158.5 | 50.0 | 208.5 |
4 | 127.3 | 83.8 | 211.1 |
5 | 139.9 | 74.5 | 214.4 |
6 | 153.1 | 66.5 | 219.6 |
7 | 149.0 | 71.7 | 220.8 |
8 | 157.9 | 64.9 | 222.7 |
9 | 139.2 | 84.4 | 223.6 |
10 | 143.2 | 84.0 | 227.2 |
11 | 164.3 | 63.7 | 228.0 |
12 | 157.5 | 73.6 | 231.1 |
13 | 164.6 | 70.2 | 234.8 |
14 | 137.0 | 103.5 | 240.5 |
15 | 159.3 | 88.5 | 247.8 |
16 | 141.4 | 106.4 | 247.8 |
17 | 140.8 | 122.1 | 262.9 |
18 | 176.9 | 87.6 | 264.5 |
19 | 178.3 | 93.7 | 272.0 |
20 | 156.6 | 133.8 | 290.4 |
Correlation (t,t + 1) | Basic insurance coefficient of variation | Correlation (t,t + 1) | Supplementary insurance coefficient of variation | |
---|---|---|---|---|
1996 | 0.58 | 1.90 | NA | 47.93 |
1997 | 0.98 | 9.54 | 0.96 | 43.20 |
1998 | 0.79 | 10.36 | 0.95 | 58.11 |
1999 | 0.91 | 7.45 | 0.98 | 55.90 |
2000 | 0.86 | 9.72 | 0.97 | 45.25 |
2001 | 0.82 | 15.69 | 0.95 | 50.17 |
2002 | 10.93 | 26.20 |
Age and gender
Firm specific constants
Equations to be estimated
Calculating elasticities
Results
Estimated coefficients
Variable | No firm specific constants | With firm specific constants α
i
| With firm specific constants α
i
| |||
---|---|---|---|---|---|---|
Estimate | t-value | Estimate | t-value | Estimate | t-value> | |
AGE 35–44 | −0.338 | −2.466 | −0.115 | −1.953 | −0.116 | −3.222 |
AGE 45–55 | −0.493 | −3.703 | −0.170 | −2.885 | −0.181 | −5.195 |
AGE 55–64 | −0.625 | −4.906 | −0.233 | −4.052 | −0.230 | −6.845 |
MALE
| 0.341 | 4.186 | 0.125 | 3.319 | 0.061 | 3.103 |
AGE 25–34(\(\bar {P_j} - \bar {P_i}\)) | −0.009 | −2.718 | −0.006 | −3.367 | 0.000 | 0.194 |
AGE 35–44(\(\bar {P_j} - \bar {P_i}\)) | −0.006 | −2.329 | −0.004 | −2.464 | 0.001 | 0.950 |
AGE 45–54(\(\bar {P_j} - \bar {P_i}\)) | −0.006 | −2.439 | −0.003 | −2.125 | 0.001 | 1.292 |
AGE 55–64(\(\bar {P_j} - \bar {P_i}\)) | −0.006 | −2.852 | −0.002 | −1.580 | 0.001 | 2.294 |
MALE(\(\bar {P_j} - \bar {P_i}\)) | −0.003 | −1.463 | −0.002 | −1.487 | −0.001 | −1.075 |
Adj R
2
| 0.034 | 0.211 | 0.305 | |||
N | 2128 | 2128 | 2128 |
Variable | No firm specific constants | With firm specific constants α
i
| With firm specific constants α
i
| |||
---|---|---|---|---|---|---|
Estimate | t-value | Estimate | t-value | Estimate | t-value | |
AGE 35–44 | −0.340 | −2.559 | −0.114 | −1.901 | −0.140 | −3.711 |
AGE 45–55 | −0.499 | −3.865 | −0.172 | −2.875 | −0.213 | −5.838 |
AGE 55–64 | −0.630 | −5.100 | −0.233 | −4.005 | −0.266 | −7.377 |
MALE
| 0.345 | 4.259 | 0.125 | 3.298 | 0.060 | 2.827 |
AGE 25–34(\(\bar {P_j^B} - \bar {P_i^B}\)) | −0.008 | −1.415 | −0.006 | −2.514 | −0.008 | −4.479 |
AGE 35–44(\(\bar {P_j^B} - \bar {P_i^B}\)) | −0.005 | −0.953 | −0.003 | −1.704 | −0.004 | −3.488 |
AGE 45–54(\(\bar {P_j^B} - \bar {P_i^B}\)) | −0.005 | −1.160 | −0.003 | −1.470 | −0.003 | −2.336 |
AGE 55–64(\(\bar {P_j^B} - \bar {P_i^B}\)) | −0.002 | −0.438 | −0.002 | −1.052 | −0.002 | −1.694 |
MALE(\(\bar {P_j^B} - \bar {P_i^B}\)) | −0.009 | −2.142 | −0.002 | −0.922 | 0.000 | 0.420 |
AGE 25–34(\(\bar {P_j^S} - \bar {P_i^S}\)) | −0.009 | −2.791 | −0.007 | −3.727 | 0.001 | 1.107 |
AGE 35–44(\(\bar {P_j^S} - \bar {P_i^S}\)) | −0.006 | −2.547 | −0.005 | −3.123 | 0.001 | 1.823 |
AGE 45–54(\(\bar {P_j^S} - \bar {P_i^S}\)) | −0.006 | −2.575 | −0.004 | −2.834 | 0.001 | 1.812 |
AGE 55–64(\(\bar {P_j^S} - \bar {P_i^S}\)) | −0.007 | −3.436 | −0.004 | −2.555 | 0.001 | 2.455 |
MALE(\(\bar {P_j^S} - \bar {P_i^S}\)) | −0.002 | −0.766 | −0.002 | −1.362 | −0.001 | −1.117 |
Adj R
2
| 0.0385 | 0.2074 | 0.3126 | |||
N | 2128 | 2128 | 2128 |
Choosing between models
-
First, we determined whether the model without firm specific constants is rejected in favour of models with firm specific constants; this was always the case.
-
Second, we assessed whether equality of coefficients on basic and supplementary premium is rejected in favour of including these as two separate explanatory variables; this was also the case.
Sensitivity checks
Elasticities
Based on equations including α
i
| Based on equations including α
j
| |||||||
---|---|---|---|---|---|---|---|---|
Women | Men | Women | Men | |||||
Elasticity | t-value | Elasticity | t-value | Elasticity | t-value | Elasticity | t-value | |
Basic insurance
| ||||||||
Age 25–34 | −0.30 | −2.51 | −0.38 | −1.84 | −0.41 | −4.48 | −0.39 | −2.68 |
Age 35–44 | −0.17 | −1.70 | −0.25 | −1.34 | −0.22 | −3.49 | −0.19 | −1.70 |
Age 45–55 | −0.14 | −1.47 | −0.22 | −1.21 | −0.15 | −2.34 | −0.12 | −1.08 |
Age 55–64 | −0.10 | −1.05 | −0.18 | −0.99 | −0.10 | −1.69 | −0.08 | −0.72 |
Supplementary insurance
| ||||||||
Age 25–34 | −0.18 | −3.73 | −0.22 | −2.81 | 0.03 | 1.11 | 0.01 | 0.28 |
Age 35–44 | −0.13 | −3.12 | −0.17 | −2.37 | 0.03 | 1.82 | 0.01 | 0.43 |
Age 45–55 | −0.12 | −2.83 | −0.16 | −2.20 | 0.03 | 1.81 | 0.01 | 0.40 |
Age 55–64 | 0.10 | −2.55 | −0.14 | −2.03 | 0.04 | 2.46 | 0.02 | 0.72 |