**Table 5.**

*Marginal effects.*

associated with taking out health insurance. On the other, reported suffering from chronic diseases is also associated with health insurance, this time reflecting adverse selection.

It could be that insurance companies are discriminating based on observable traits, such as smoking. Or, related to high health risks, such as suffering from a chronic disease, it may be the case that people fail to report them. Perhaps insurance companies do not "cream skim" based on these conditions, either because they lack sufficient reliable information, or because they may calculate the probability that a person suffers from a certain disease at a certain age, or even because the insurance company can control claims associated with those health conditions by cost-sharing.

Another explanation of the mixed results found when relating health risk to health insurance is based on the demand side of the market. Maybe there is heterogeneity in the risk preferences of older people. In some countries, healthier individuals might be more risk-averse [14, 16] and so they are more prone to take out voluntary health insurance. Maybe this is the case with Portugal as it was with the UK [39]. On the other hand, people suffering from chronic diseases have a default health status that they consider to be a reference status in the sense proposed by the prospect theory [40]. These people may thus tend to be risk-averse with reference to their health status, and consequently, they are also more prone to have a private health insurance policy.

Finally, regarding the existence of parallel occupation-based insurance plans, our results indicate that people benefiting from ADSE, the largest occupation-based insurance for public servants, or from any other form of private or public health insurance (public health insurance is for the armed forces; private insurance includes bank workers, Portugal – Telecom workers, and postal CTT workers) are less likely to have VHI. This is expected to happen because occupation-based insurances provide a second layer of health coverage on top of the universal provided by the NHS. People benefiting from occupation-based insurance policies pay taxes to finance the NHS and pay a percentage of their income to finance occupation-based insurance. Therefore, this double financing by people deters them from looking for additional private health insurance coverage. In fact, these people do not need private health insurance because their health care needs are covered either by the NHS or by their occupation-based insurance.

The organization of the Portuguese health system creates inequity in access to health care. In the first place, people with double coverage have easier access to health care, and then people with high incomes can afford to buy private health insurance coverage. On top of this, inequality is aggravated by a tax system that gives some benefits to wealthier people for buying private health insurance or for spending on private health care [1]. The findings reported in this work confirm the existence of this sort of inequality, especially among older people.

One limitation of this work is that it is not possible to analyze the type of coverage provided to older people by voluntary private health insurance. This sort of information would show us what health care services older people want, and what could be lacking in the supply of NHS.

The results found in our analysis provide some insights into what makes older people decide to take out voluntary private health insurance. We have concluded that income is a determinant factor for taking out private health insurance, but it is also a factor for generating inequality in health care access. Older people can find it hard to access dental care or simple eye care because it is not covered by the NHS, or because the NHS waiting lists are too long. But the difficulty of complementing NHS coverage with private health insurance increases health care access inequity. Health and social policies may aim to narrow the gap either by providing health care in the NHS or by subsidizing the purchase of private health insurance for low-income older people. The first approach to this has already been put into place. The instrument called "dentist-check" for older people, created by the Ministry of Health attempts to mitigate the inequality in access to dental care, but it needs to be assessed.
