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The Effect of Health Insurance Coverage on the Use of Medical Services

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  • Michael Anderson
  • Carlos Dobkin
  • Tal Gross

Abstract

Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. We exploit a sharp change in insurance coverage rates that results from young adults "aging out" of their parents' insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. (JEL G22, I11, I18)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 4 (2012)
Issue (Month): 1 (February)
Pages: 1-27

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Handle: RePEc:aea:aejpol:v:4:y:2012:i:1:p:1-27

Note: DOI: 10.1257/pol.4.1.1
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References

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  1. Dafny, Leemore & Gruber, Jonathan, 2005. "Public insurance and child hospitalizations: access and efficiency effects," Journal of Public Economics, Elsevier, vol. 89(1), pages 109-129, January.
  2. Amy Finkelstein, 2007. "The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 1-37, 02.
  3. Joseph J. Doyle, 2005. "Health Insurance, Treatment and Outcomes: Using Auto Accidents as Health Shocks," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 256-270, May.
  4. Cutler, David M. & Gelber, Alexander M., 2009. "Changes in the Incidence and Duration of Periods Without Insurance," Scholarly Articles 5344531, Harvard University Department of Economics.
  5. Daniel Polsky & Sean Nicholson, 2004. "Why Are Managed Care Plans Less Expensive: Risk Selection, Utilization, or Reimbursement?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 71(1), pages 21-40.
  6. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
  7. Janet Currie & Sandra Decker & Wanchuan Lin, 2008. "Has Public Health Insurance for Older Children Reduced Disparities in Access to Care and Health Outcomes?," NBER Working Papers 14173, National Bureau of Economic Research, Inc.
  8. Joseph J. Doyle Jr., 2005. "Health Insurance, Treatment and Outcomes: Using Auto Accidents as Health Shocks," NBER Working Papers 11099, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Dan Shane; & Pravin Trivedi;, 2012. "What Drives Differences in Health Care Demand? The Role of Health Insurance and Selection Bias," Health, Econometrics and Data Group (HEDG) Working Papers 12/09, HEDG, c/o Department of Economics, University of York.
  2. Amy Finkelstein & Sarah Taubman & Bill Wright & Mira Bernstein & Jonathan Gruber & Joseph P. Newhouse & Heidi Allen & Katherine Baicker, 2012. "The Oregon Health Insurance Experiment: Evidence from the First Year," The Quarterly Journal of Economics, Oxford University Press, vol. 127(3), pages 1057-1106.
  3. Finkelstein, Amy, et al., 2011. "The Oregon Health Insurance Experiment: Evidence from the First Year," Working Paper Series rwp11-040, Harvard University, John F. Kennedy School of Government.
  4. Lu, Fangwen, 2014. "Insurance coverage and agency problems in doctor prescriptions: Evidence from a field experiment in China," Journal of Development Economics, Elsevier, vol. 106(C), pages 156-167.
  5. Miller, Sarah, 2012. "The effect of insurance on emergency room visits: An analysis of the 2006 Massachusetts health reform," Journal of Public Economics, Elsevier, vol. 96(11), pages 893-908.
  6. Denise Doiron & Denzil G Fiebig & Agne Suziedelyte, 2013. "Hips and hearts: the variation in incentive effects of insurance across hospital procedures," Discussion Papers 2013-14, School of Economics, The University of New South Wales.
  7. Koch, Thomas G., 2013. "Using RD design to understand heterogeneity in health insurance crowd-out," Journal of Health Economics, Elsevier, vol. 32(3), pages 599-611.
  8. Briggs Depew & Eric Cardella, . "The Effect of Health Insurance Coverage on the Reported Health of Young Adults," Departmental Working Papers 2014-08, Department of Economics, Louisiana State University.
  9. Georgiou, Georgios, 2014. "Does increased post-release supervision of criminal offenders reduce recidivism? Evidence from a statewide quasi-experiment," International Review of Law and Economics, Elsevier, vol. 37(C), pages 221-243.
  10. Phillip B. Levine & Robin McKnight & Samantha Heep, 2009. "Public Policy, Health Insurance and the Transition to Adulthood," NBER Working Papers 15114, National Bureau of Economic Research, Inc.
  11. Astrid Kiil, 2012. "Does employment-based private health insurance increase the use of covered health care services? A matching estimator approach," International Journal of Health Care Finance and Economics, Springer, vol. 12(1), pages 1-38, March.

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