Patterns of voluntary enrolment in private vs. social health insurance in the Philippines: Is adverse selection or moral hazard a concern? S. Quimbo, J. Capuno, A. Kraft, C. Tan, V. Fabella, and X. Javier University of the Philippines School of Economics 2012 Research Conference on Microinsurance University of Twente Enschede, the Netherlands 11 April 2012
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S. Quimbo, J. Capuno , A. Kraft, C. Tan, V. Fabella , and X. Javier
Patterns of voluntary enrolment in private vs. social health insurance in the Philippines : Is adverse selection or moral hazard a concern?. S. Quimbo, J. Capuno , A. Kraft, C. Tan, V. Fabella , and X. Javier University of the Philippines School of Economics - PowerPoint PPT Presentation
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Patterns of voluntary enrolment in private vs. social health insurance in the Philippines:
Is adverse selection or moral hazard a concern?
S. Quimbo, J. Capuno, A. Kraft, C. Tan, V. Fabella, and X. JavierUniversity of the Philippines School of Economics
2012 Research Conference on MicroinsuranceUniversity of Twente
Enschede, the Netherlands11 April 2012
Study Setting
Background
• The National Health Insurance Program (NHIP) was created in 1995 and mandated to provide universal coverage by 2010
• Debate on what the true coverage rate is, but according to the NDHS (2008), NHIP coverage rate is 38 percent.
Background
• NHIP enrollment: multiple programs with varying strategies
– Formal sector (including OFWs): mandatory– Indigent: sponsored by the local and national governments– Retirees: fully sponsored by the program– Informal sector: voluntary
• The informal sector is heterogeneous, but on the average, have lower incomes.
Policy Questions
• Q1: Will the informal sector voluntarily participate in the NHIP?
• Q2: Is voluntary participation in the NHIP subject to adverse selection?
• Q3: Is the NHIP at risk for moral hazard, particularly from those who voluntarily participated?
Data
• Data from a baseline survey for a randomized experiment on NHIP premium subsidies– Funded by the Health Equity and Financial Protection in
Asia project – Philippines
• This nationally representative survey was conducted in 2010
• About 3000 households, covering over 14,000 individuals, from all regions in the country
Theoretical Frame• Stage 1 decision: to be insured or not
– With voluntary participation and imperfect information, adverse selection could be a problem
• Stage 2 decisions:
– Demand side: conditional on illness, whether to use a health care facility or not
– Supply side: what price to charge
– With imperfect information, moral hazard could be a problem on both demand and supply-sides: overutilization and/or price discrimination
EstimationStage 1 Decision:
Multinomial probit model
Pr(i) = f(income, cost of treatment, health shocks, SES) + u