Complementary health insurance in France. Who pays? Why? Who will suffer from public disengagement?

The study is based on a rare database with information about health status, socioeconomic characteristics and the complementary health insurance choices of the French population. We intend to characterise a two-stage decision process: first, the decision to purchase complementary health insurance, and then the factors related to choice of policy quality. Our econometric study indicates that (i) income level has a strong and significant effect on the decision to purchase complementary insurance, whilst there is no evidence that health risk considerations affect this decision at all; (ii) the individual decision about quality is associated barely if at all with any rational explanatory variables. The population's concrete behaviour, revealed by the study, is consistent with an allocation of low-risk people to private insurance and high-risk people to public insurance. Complementary insurance is not especially relevant to patients with serious diseases, who depend much more on the public system. If the public insurance system were to disengage significantly from coverage of serious illness, a vacuum would be created that would leave people at high risk without full coverage. These results have broad implications for numerous national systems of social protection seeking a new mix between private and public insurance.