Jung, JuergenTran, Chung2018-05-142018-05-142016-06Juergen Jung & Chung Tran, 2016. "Social Health Insurance: A Quantitative Exploration," Working Papers 2016-02, Towson University, Department of Economics, revised Jun 2016.JEL: I13JEL: D52JEL: E62JEL: H31http://hdl.handle.net/11603/10747We quantify the welfare implications of three alternative approaches to providing health insurance: (i) a US-style mix of private and public health insurance, (ii) compulsory univer- sal public health insurance (UPHI) and (iii) private health insurance for workers combined with government subsidies and price regulation. We use a Bewley-Grossman lifecycle model calibrated to match the lifecycle structure of earnings and health risks in the US. For all three systems we find that welfare gains triggered by a combination of improvements in risk sharing and wealth redistribution dominate welfare losses caused by tax distortions and ex-post moral hazard effects. Overall, the UPHI system outperforms the other two systems in terms of welfare gains if the coinsurance rate is properly designed. A direct comparison between the US system to a well-designed UPHI system reveals that large welfare gains are possible in the long-run. However, such a radical reform faces political impediments due to opposing welfare effects across different income groups.application/pdf51 pagesen-USHealth capitalLifescycle health riskIncomplete insurance marketsSocial securitySocial insuranceOptimal policyDynamic general equilibrium with idiosyncratic shocksEquilibrium (Economics)Text