The new co-payment policy under Taiwan’s National Health Insurance: welfare gain or welfare loss?

Abstract

This paper provides a welfare assessment of the new Taiwan National Health Insurance (NHI) co-payment policy, enacted July 15, 2005. This policy creates a pricing mechanism designed to entice patients to first seek outpatient care at local clinics rather than hospitals. Our empirical findings suggest that while the new policy results in a net welfare gain, it is far less than the expected annual growth in NHI medical expenditure. Thus, additional policy changes will be required to deal with Taiwan’s NHI future financial shortfalls.

Keywords::

• co-payment policy
• count data model
• National Health Insurance
• NHI
• sample selection
• Taiwan

Acknowledgement

The authors would like to thank Chunhuei Chi for providing valuable data and helpful comments in the first draft of this report.

Financial & competing interests disclosure

The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

No writing assistance was utilized in the production of this manuscript.