NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Financial Risk Protection from Social Health Insurance

Kayleigh Barnes, Arnab Mukherji, Patrick Mullen, Neeraj Sood

NBER Working Paper No. 22620
Issued in September 2016
NBER Program(s):DEV, HC, HE, PE

This paper estimates the impact of social health insurance on financial risk reduction by utilizing data from a natural experiment created by the phased roll out of a social health insurance program for the poor in India. We estimate the impact of insurance on the distribution of out-of-pocket costs, frequency and amount of money borrowed for health reasons, and the likelihood of incurring catastrophic health expenditures. We use a stylized expected utility model to compute the welfare effects associated with changes due to insurance in the distribution of out-of-pocket costs. We adjust the standard model to account for the unique conditions of a developing country by incorporating consumption floors, informal borrowing, and selling of assets. These adjustments allow us to estimate the value of financial risk reduction from both consumption smoothing and asset protection channels. Our results show that social insurance reduces out-of-pocket costs with larger effects in the higher quantiles of the out-of-pocket cost distribution. In addition, we find a reduction in the frequency and amount of money borrowed for health reasons. Finally, we find that the value of financial risk reduction outweighs the total per household cost of the social insurance program by two to five times.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22620

Published: Kayleigh Barnes & Arnab Mukherji & Patrick Mullen & Neeraj Sood, 2017. "Financial risk protection from social health insurance," Journal of Health Economics, .

Users who downloaded this paper also downloaded* these:
Blanchet, Caroli, Prost, and Roger w22024 Health Capacity to Work at Older Ages in France
Fryer w22399 An Empirical Analysis of Racial Differences in Police Use of Force
Gorry, Gorry, and Slavov w21326 Does Retirement Improve Health and Life Satisfaction?
Di Maggio and Kermani w22625 The Importance of Unemployment Insurance as an Automatic Stabilizer
Hvide and Jones w22057 University Innovation and the Professor's Privilege
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us