Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227294 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13767
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
How should payment systems of means-tested benefits be designed to improve the financial situation of needy recipients most effectively? We study this question in the context of mandatory health insurance in Switzerland, where recipients initially received either a cash transfer or subsidized insurance premiums (a form of in-kind transfer). A federal reform in 2014 forced cantons (i.e. states) to universally switch to in-kind provision. We exploit this setting based on a difference-in-differences design, analyzing rich individual-level accounting data and applying a machine learning approach to identify cash recipients prior to the reform. We find that switching from cash to in-kind transfers reduces the likelihood of late premiums payments by about 20% and of government debt collection for long-term missed payments by approximately 16%. There is no evidence for a negative spillover effect on the timely payment of the non-subsidized coinsurance bills for health services after the regime change.
Subjects: 
health insurance
transfers
cash subsidies
in-kind transfers
financial distress
debt collection
JEL: 
D14
G52
H24
I13
Document Type: 
Working Paper

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