Objective: To examine the effect of supplemental health insurance for prescription drug coverage on health care utilization as measured by the number of visits to physicians in a setting with incomplete public insurance coverage.
Methods: A latent-class modeling approach is used to capture the presence of latent heterogeneity in the utilization of physician services. The insurance variable is grouped into three different types, depending upon how it is provided - by government, employers, or private companies. The data for this study come from the Ontario component of the Canadian Community Health Survey 2005, a representative sample of the Ontario population, conducted by Statistics Canada.
Results: We find that physician health care utilization responds to the presence and type of insurance, and that the results vary substantially across different types of individuals based on unobservable health status characterized by two latent classes: low users (healthy) and high users (less healthy).
Conclusions: The fact that not all individuals have access to supplemental insurance for prescription drug coverage calls into question the universality of public insurance that does not cover important complementary services, such as outpatient prescription drugs.
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