TY  - RPRT
        AU  - Klein, Tobias J.
AU  - Salm, Martin
AU  - Upadhyay, Suraj
        TI  - Patient Cost-Sharing and Redistribution in Health Insurance
        PY  - 2024/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16778
        UR  - https://www.iza.org/publications/dp16778
        AB  - Health insurance premiums often do not reflect individual health risks, implying redistribution from individuals with low health risks to individuals with high health risks. This paper studies whether more cost-sharing leads to less redistribution and to lower welfare of high-risk individuals. This could be the case because more cost-sharing increases out-of-pocket payments especially for high-risk individuals. We estimate a structural model of healthcare consumption using administrative data from a Dutch health insurer. We use the model to simulate the effects of a host of counterfactual policies. The policy that was in place was a 350 euro deductible. Our counterfactual experiments show that redistribution would decrease when the deductible would increase. Nonetheless, high-risk individuals can benefit from higher levels of cost-sharing. The reason is that this leads to lower premiums because both high-risk and low-risk individuals strongly react to the financial incentives cost-sharing provides.
        KW  - health insurance
KW  - moral hazard
KW  - patient cost-sharing
KW  - redistribution
        ER  -