Changes in the demand for private medical insurance following a shift in tax incentives
Rodrí guez Martí nez, Marisol, 1951- (Universitat de Barcelona. Departament de Política Econòmica i Estructura Econòmica Mundial)
Stoyanova, Alexandrina Petrova (Universitat Pompeu Fabra. Departament d'Economia i Empresa)
Xarxa de Referència en Economia Aplicada (XREAP)

Publicación:	Xarxa de Referència en Economia Aplicada (XREAP) 2006
Descripción:	33 p.
Resumen:	The 1998 Spanish reform of the Personal Income Tax eliminated the 15% deduction for private medical expenditures including payments on private health insurance (PHI) policies. To avoid an undesirable increase in the demand for publicly funded health care, tax incentives to buy PHI were not completely removed but basically shifted from individual to group employer-paid policies. In a unique fiscal experiment, at the same time that the tax relief for individually purchased policies was abolished, the government provided for tax allowances on policies taken out through employment. Using a bivariate probit model on data from National Health Surveys, we estimate the impact of said reform on the demand for PHI and the changes occurred within it. Our findings suggest that the total probability of buying PHI was not significantly affected. Indeed, the fall in the demand for individual policies (by 10% between 1997 and 2001) was offset by an increase in the demand for group employer-paid ones, so that the overall size of the market remained virtually unchanged. We also briefly discuss the welfare effects on the state budget, the industry and society at large.
Derechos:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, i la comunicació pública de l'obra, sempre que no sigui amb finalitats comercials, i sempre que es reconegui l'autoria de l'obra original. No es permet la creació d'obres derivades.
Lengua:	Anglès
Colección:	Xarxa de Referència en Economia Aplicada (XREAP). Documents de treball de la Xarxa de Referència en Economia Aplicada (XREAP)
Colección:	CREAP ; 2006-12
Documento:	Working paper
Materia:	Private health insurance ; Tax reform ; Spain ; Assegurances de salut ; Canvis impositius

33 p, 619.9 KB

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