Insurance state and the number of doctor visits A latent class panel approach with German data

Deductibles in health insurance are often regarded as a means to contain health care costs when the behaviour of individuals exhibits moral hazard. However, in the absence of moral hazard, voluntarily chosen deductibles rather lead to adverse selection. I use a set of new variables in the German Socioeconomic Panel for the years 2002, 2004 and 2006 that measure individual health more accurately and include risk-attitudes towards health in order to detect the price-elasticity of demand for health care. A latent class approach that takes into account the panel structure reveals that the effect of deductibles on the number of doctor visits is negligible. Private add-on insurance, however, increases the number of doctor visits. JEL Classification: I11, I18