Failure to take-up public healthcare entitlements: evidence from the medical card system in Ireland

While population health and welfare can be improved through the provision of non-cash benefits, such as free healthcare, many welfare improving schemes have low rates of take up amongst those eligible for such a benefit. One interesting example of this is the Medical Card scheme in Ireland. Medical Cards are a non-cash benefit that provide free primary, community, and hospital care, as well as heavily subsidised prescriptions drugs, for those below specific income means-test threshold. However, despite the significant benefits afforded by a Medical Card, many people forego entitlement. While this has been of concern to policymakers, the prevalence of, and reason for, non-take up, have to date not been examined in-depth. Using detailed household demographic, healthcare, income and expenditure data, this paper estimates the Medical Card take-up rate, examines the reasons for non-take, and estimates the additional healthcare cost burden to individuals due to non-take-up. The paper estimates that 31% of eligible individuals do not take up a Medical Card. Private health insurance coverage, receipt of social welfare, employment status and health status are all strongly correlated with take up. Results suggest that of a lack of information about eligibility status and social stigma are key factors driving non take up. The paper estimates that families who forego their entitled Medical Card typically spend an additional €202 annually on healthcare. Furthermore, as a consequence of higher purchase rates of, perhaps unnecessary, private health insurance, families not taking up their entitlement spend an additional €489 per annum on PHI premia. Welfare losses are likely to be even higher if forgoing medical care due to cost results in future negative health outcomes.