Aging population: Public willingness to pay for healthcare hinges on perceived benefits and risks

In a recent study, a research team consisting of Associate Professor Tomoko Matsumoto and Junior Associate Professor Daiki Kishishita from Tokyo University of Science, Japan, assessed whether informing individuals about the benefits they would personally receive in the future from the healthcare system could lead to successful persuasion. This study was published in the European Journal of Political Economy on 8 August 2024.

Highlighting the rationale behind their study, the authors say, "Aging-related health risks will affect everyone, regardless of socioeconomic groups. However, studies indicate that people are not well-informed about the government's fiscal activities, particularly related to public healthcare systems, and the benefits they offer. So, informing individuals about self-benefits from the healthcare system may increase their political support for higher contributions to healthcare insurance to sustain the system."

Accordingly, researchers developed a two-period overlapping generations model and hypothesized that informing people about future self-benefits may increase their support for paying more for health insurance. However, this support reduces when individuals learn about the system's fiscal unsustainability due to an aging population.

To test these hypotheses, researchers conducted an online survey experiment with 4,367 Japanese respondents, who were mostly below 75 years of age. They were randomly assigned to receive information framed in terms of the future self-benefits (Framing S) or current benefits received by older adults (Framing N). In Framing S, they were again randomly assigned either to the treatment group that received information about future self-benefits or the control group that did not. The treatment group was further divided into those who were informed of the fiscal risks and those who were not. Respondents then rated their support for a 1% increase in health insurance contributions. The same process was followed for Framing N. Lastly, researchers compared the results from both groups to see which framing was more effective.

In Framing S, 81% of the respondents underestimated the benefits of the public healthcare system. This suggests that these respondents' expectations would increase when provided with the actual self-benefits. So, researchers considered only these respondents for further analysis.

Surprisingly, on average, the treatment (informing people about future self-benefits) had no influence on gaining support for higher contributions to health insurance. Interestingly, for those who were unaware of the fiscal risks, the treatment increased support by 28.9 percentage points. However, as expected, this positive effect disappeared once the unaware group learned about the fiscal unsustainability of the public healthcare system.

In Framing N (where future self-benefits were not explicitly highlighted), the treatment had no effect on respondents who were unaware of the fiscal risks. However, among those who were aware, support dropped by eight percentage points. "The results indicate that informing the benefits without framing them as self-benefits may have a limited impact on increasing political support for higher contributions to health insurance," says the authors.

The findings carry significant implications for policymakers, governments, and countries with struggling public healthcare systems and an aging population.

"To increase support for health insurance systems, it is important to inform people about future self-benefits. But first, people need to believe that they will definitely benefit from the system in the future. This could be achieved by implementing fiscal consolidation policies to build trust in public finance," concludeDr. Matsumoto and Dr. Kishishita.