The effect of cost-sharing in private health insurance on the utilization of health care services between private insurance purchasers and non-purchasers: A study of the Korean health panel survey (2008-2012)

Background: Private health insurance in South Korea mainly functions as supplementary and complementary health insurance that compensates for insufficient coverage by National Health Insurance. However, full private coverage of public sector cost-sharing led to the problem of encouraging moral hazard-induced utilization, resulting in a policy change that occurred in October 2009. At that time, the Korean government introduced a minimum cost-sharing policy for indemnity health insurance. The purpose of this study was to analyze the effect of cost-sharing in private health insurance on health care utilization. Methods: We analyzed data collected from the Korean Health Panel Survey from October 2008 to December 2011. We restricted the two groups to 803 purchasers with indemnity health insurance and 7023 non-purchasers who did not obtain any private health insurance. A difference-in-difference analysis was used to evaluate the effect of the 2009 policy. Results: After the policy change, the utilization of outpatient visits by purchasers gradually decreased more than non-purchasers (0.015 in 2009 [p=0.758], -0.117 in 2010 [p <0.016], and -0.140 in 2011 [p = 0.004]). However, utilization of inpatient services was not statistically significant. Notably, the magnitude of the cost-sharing effect in indemnity health insurance was stronger for those receiving medical aid. Among this group, utilization of outpatient services (after the policy change in 2009) decreased more so than non-purchasers. Patients with three or more chronic diseases have not changed their health care utilization. Conclusions: Our results implied meaningful lessons for decision-makers and future health insurance policies in Korea and other countries in terms of cost-sharing in medical care. When policy makers intend to implement the cost-sharing, a different copayment scheme is needed according to the socioeconomic status or disease severity.