The Effect Of Health Insurance On Health Care Utilization: Evidence From Malaysia

The link between health insurance ownership and over-utilization of health care services are highly debated. This paper examines the effect of insurance ownership on hospital utilization within the context of Malaysia. The study employs the data from Malaysia National Health and Morbidity Survey III and 14,223 respondents are selected for this purpose. Malaysia provides new evidence from an emerging market where voluntary purchase of private health insurance co-exists with almost free public health care. Logit model is used to identify the effect of insurance ownership on the probability of utilizing health care while the zero truncated Poisson model are used to identify the role of insurance ownership on the intensity of utilization. From the analysis, it is found that insurance ownership determines access to health care but it does not influence frequency of use. The findings suggest moral hazard problem may not be prevalent in the Malaysian health insurance market. Thus, institutionalizing health insurance through initiative such as national health insurance may be a sustainable program and give better access to care for the public. (C) 2016 Published by Future Academy www.FutureAcademy.org.uk