Supplementary Health Insurance and Moral Hazard in the Netherlands

This paper investigates the role of risk aversion in the decision on the uptake of a supplementary health insurance and will consequently look at the effects of having such an insurance on healthcare utilisation. The relationship between these aforementioned variables will be tested using OLS regressions and a multivariate probit model. This study provides evidence that risk aversion has a positive effect on the probability of opting for a supplementary health insurance. Additionally, healthcare utilisation is found to be higher due to the uptake of health insurance. This research did not manage to show whether this relationship is caused by moral hazard or adverse selection.