Private Health Insurance in Chile: Basic or Complementary Insurance for Outpatient Services?

A private health insurance system has existed in Chile since 1981 and has covered over a quarter of the population of that country since 1995. This article examines that system in economic terms. The analysis focuses on the incentive effects of state regulations governing the formulation of private health insurance policies and the relationship with the state health service. The imbalance in policy termination rights and the unrestricted possibility to return to the state system emerge as central functional elements. The article postulates that the private system represents, for many, not a full coverage scheme but an additional policy for outpatient benefits, regardless of its officially stated aims.