Effects of public and private health insurance on medical service utilization in the National Health Insurance System: National panel study in the Republic of Korea

Moral hazard or utilization hazard refers to the phenomenon during which patients overuse medical services under national health insurance (NHI) because the services are free or the patients are required to pay only a portion of the utilization costs. The aim of this study is to investigate how NHI and private health insurance (PHI) systems influence increases in health care utilization rates. We designed a longitudinal study to examine the utilization of healthcare services between those insured with NHI or PHI and uninsured Koreans using nationally representative four-year panel data from 13,798 participants. This study was conducted using hierarchical multivariate Poisson regression analyses in which covariates and interaction terms are applied after adjusting for the heterogeneous treatment effect. After adjusting covariates including disease status, lower income Koreans who were covered by medical aid were respectively 2.26 and 1.23 times more likely to receive inpatient care and outpatient care than those who were covered by NHI. When the interaction term of type of insurance was included in the model, those were covered by both medical aid and PHI were respectively 2.38 and 1.25 times more likely to receive inpatient care and outpatient care than those who were covered by only NHI. The moral hazard behind insurance membership, depending on how NHI maintains policies to confer benefits, may give rise to differences in medical utilization. This phenomenon must be closely monitored to find a way to reform NHI when the rights of medical service consumers are solidified through PHI.