Income inequality and self-rated health status in Colombia.

BACKGROUND: The negative association between income inequality and health has been known in the literature as the Income Inequality Hypothesis (IIH). Despite the multiple studies examining the validity of this hypothesis, evidence is still inconclusive, and the debate remains unsolved. In addition, relatively few studies have focused their attention on developing or emerging economies, where levels of inequality tend to be the highest in the world. This work examines the statistical association between income inequality and self-rated health status in Colombia, a highly unequal Latin American country. METHODS: To explore whether this association is present in the general population or whether it is only confined to the bottom of the income distribution, we use data from the 2011-2019 National Quality of Life Survey. Multiple probit estimations are considered for testing the robustness of the IIH. RESULTS: Evidence favouring the IIH was found, even after controlling for individual income levels, average regional income, and socioeconomic characteristics. The link between income inequality and the probability of reporting poor health seems to be present across all income quintiles. However, the magnitude of such association is considerably smaller when using inequality measures with relatively greater sensitivity to income differences among the rich. CONCLUSIONS: The association between regional income inequality and individual's self-rated health status in Colombia is not only confined to low-income individuals but extends across all socioeconomic strata. This association is robust to the income inequality measure implemented, the income-unit of analysis, and changes in the sample. It is suggested that reducing income disparities can potentially contribute to improving individual's health.

Price elasticity of demand for voluntary health insurance plans in Colombia.

BACKGROUND: Since 1993, Colombia has had a mandatory social health insurance scheme that aims to provide universal health coverage to all citizens. However, some contributory regime participants purchase voluntary private health insurance (VPHI) to access better quality health services (i. e., physicians and hospitals), shorter waiting times, and a more extensive providers' network. This article aims to estimate the price elasticity of demand for the VPHI market in Colombia. METHODS: We use data from the 2016-2017 consumer expenditure national survey and apply a Heckman selection model to address the selection problem into purchasing private insurance. Using the estimation results to further estimate the price semi-elasticity for VPHI, we then calculate the price elasticity for the households' health expenditure and acquisition of VHPI. RESULTS: Our main findings indicate that a 1% VPHI price increase reduces the proportion of households affiliated to a VPHI in the country by about 2.32% to 4.66%, with robust results across sample restrictions. There are relevant differences across age groups, with younger households' heads being less responsive to VPHI price changes. CONCLUSIONS: We conclude that the VPHI demand in Colombia is noticeably elastic, and therefore tax policy changes can have a significant impact on public health insurance expenditures. The government should estimate the optimal VPHI purchase in order to reduce any welfare loss that the current arrangement might be generating.