[Selection or Better Service - Why are those with Private Health Insurance Healthier than those Covered by the Public...

From previous research we know that privately insured people in Germany are healthier than those covered by the compulsory public health insurance system. Whether this difference is due to a selection of healthier people into the private health insurance or a causal effect in the sense that private health insurance better helps their clients to stay in good health than public insurances do is not clear. Using panel regression based on the German Socioeconomic Panel (GSOEP), we show that health status is better for individuals who have bought a private health insurance certificate since 2002 compared to those who remained within the public insurance system. Depending on age at joining the insurance system, the health gap between privately and publicly insured people is widening with time since joining the private insurance system. We argue that these findings point to a causal effect.