Título: Private Health Insurance and Unmet Medical Needs: A Political Economy Analysis
Sala: E22
Hora: 12:30
Resumen:
The expansion of private health insurance is often justified by a “decongestion effect,”
whereby private provision is expected to relieve pressure on public healthcare systems. This
paper challenges that view by highlighting the political economy feedback effects generated by
private opt-out. We develop a probabilistic voting model in which income-heterogeneous
individuals can purchase tax-deductible private insurance and exit the publicly financed system.
While private uptake may mechanically reduce congestion, it simultaneously alters political
support for public provision. As higher-income individuals opt out, equilibrium public spending
weakens, potentially offsetting congestion gains and increasing inequality in access.
We then examine whether cross-country evidence is consistent with these equilibrium
predictions. Using data from 26 European countries, we analyze the relationship between private
insurance coverage and income-related disparities in unmet medical needs, a proxy for effective
access to public care. We document that higher private coverage is associated with a steeper
income gradient in unmet needs, with no evidence of improved access for lower-income groups.
These patterns are consistent with the model’s political feedback mechanism and highlight the
importance of accounting for political equilibrium effects when evaluating mixed healthcare
systems.