Basic versus Supplementary Health Insurance: The Role of Cost Effectiveness and Prevalence

TILEC Discussion Paper No. 2014-039

CentER Discussion Paper No. 2014-065

37 Pages Posted: 30 Oct 2014

See all articles by Jan Boone

Jan Boone

Tilburg University - Center for Economic Research (CentER); Centre for Economic Policy Research (CEPR); TILEC

Date Written: October 24, 2014

Abstract

In a model where patients face budget constraints that make some treatments unaffordable, we ask which treatments should be covered by universal basic insurance and which by private voluntary insurance. We argue that both cost effectiveness and prevalence are important if the government wants to maximize the health gain that it gets from its health budget. In particular, basic insurance should cover treatments that are used by people who at the margin buy treatments that are highly cost effective. This is not the same as covering treatments that are themselves highly cost effective.

Keywords: universal basic health insurance, voluntary supplementary insurance, public vs private insurance, access to care, cost effectiveness

JEL Classification: I13, I14, D82, H51

Suggested Citation

Boone, Jan, Basic versus Supplementary Health Insurance: The Role of Cost Effectiveness and Prevalence (October 24, 2014). TILEC Discussion Paper No. 2014-039, CentER Discussion Paper No. 2014-065, Available at SSRN: https://ssrn.com/abstract=2516298 or http://dx.doi.org/10.2139/ssrn.2516298

Jan Boone (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2399 (Phone)
+31 13 466 3042 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

TILEC ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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