Co-Pay and Feel Okay: Self-Rated Health Status After a Health Insurance Reform


  • Alfredo R. Paloyo

    Corresponding author
    1. Rheinisch-Westfälisches Institut für Wirtschaftsforschung
    • Direct correspondence to Alfredo R. Paloyo, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Hohenzollernstr. 1-3, 45128 Essen, Germany 〈〉.

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  • For their valuable contributions to the improvement of this article, I thank the following: Thomas K. Bauer, Ronald Bachmann, Daniel Baumgarten, Christoph Ehlert, Simon Golshan, Tobias Körner, Hendrik Schmitz, the editors, and five anonymous referees. Participants of the RGS Workshop, the 23rd Annual Conference of the European Society for Population Economics, the 24th Annual Congress of the European Economic Association, and the 2009 Annual Conference of the European Association of Labor Economists are gratefully acknowledged. This research was conducted while I was a graduate student at the Ruhr Graduate School in Economics.



The reliability of general self-rated health status is examined using the reform of the public health insurance system of Germany in 2004 as a source of exogenous variation. The reform introduced a co-payment for ambulatory doctor visits and increased the co-payments for prescription drugs.


This natural experiment allows identification of the causal impact of the program on self-assessed health (SAH). A difference-in-differences estimator is applied to estimate the effect of the reform on SAH.


Using data from the German Socio-Economic Panel, the results indicate that the reform improved the treatment group's average SAH even when there was no discernible impact on actual health.


The exercise reveals the sensitivity of SAH to a perturbation in the insurance system. More objective measures of health may be needed to acquire an accurate assessment of general health when the health system is in flux.