International competition and the demand for health insurance in the US: Evidence from the Texas-Mexico border region

H. Shelton Brown, José A. Pagán, Elena Bastida

Research output: Contribution to journalArticlepeer-review

Abstract

Conventional economic explanations for uninsurance should apply to all geographic regions in the United States. However, the border states of California, Arizona, New Mexico and Texas have the highest rates of uninsurance in the US, accounting for over 30% of the total US uninsured population. We use survey data from the fourth wave of the Border Epidemiologic Study on Aging (BESA), a survey from a predominantly Mexican American region of South Texas from 2005 to 2006, to analyze how health insurance coverage in the US is related to the use of health care services in Mexico. BESA includes data on the use of health care services in the US and Mexico. We estimate probit models to investigate the association between having insurance coverage in the US and having a regular doctor in Mexico, the independent variable of interest. Separate models are estimated with having private insurance, Medicare Part B insurance, and any type of public insurance as dependent variables. We deal with the endogeneity, due to reverse causality, of having a regular doctor in Mexico by using instrumental variables in a bivariate probit model. The instruments are dental care utilization in Mexico and a variable measuring frequently visiting Mexico. The results show that competition from Mexico lowers the demand for health insurance coverage in the US side of the border.

Original languageEnglish (US)
Pages (from-to)25-38
Number of pages14
JournalInternational Journal of Health Care Finance and Economics
Volume9
Issue number1
DOIs
StatePublished - 2009

Keywords

  • Border
  • Health insurance
  • Mexico

ASJC Scopus subject areas

  • Health(social science)
  • Finance
  • Economics, Econometrics and Finance(all)

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