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.