Losing health insurance when young: Impacts on usage of medical services and health in Colombia

Nearly 8 percent of the young adults in Colombia are “aged out" from their parents' health insurance coverage when they turn 18 years old, making them the group with the lowest health insurance coverage among all age groups. In this study we exploit a regulation in Colombia that exogenously changes health insurance coverage of young adult dependents to analyze the effects on their usage of medical services and health status. We assess this effect using a regression discontinuity design (RDD) and data from the Encuesta Nacional de Calidad de Vida Survey for Colombia from 2010 to 2013. Losing health insurance coverage implies a change in usage within the pool of different medical services, led by a change in their relative prices. As a result, some medical services are prone to be less used (i.e. preventive services), while other medical services are more consumed (i.e. private medical services and emergency department [ED] visits). Additionally, since under Colombian regulation, ED care cannot be denied to anyone if their life is at risk, regardless of health insurance status, uninsured young adults tend to use this service more instead of regular medical services (such as preventive healthcare or visits to physicians or specialists). We find, consistent with the change in relative prices, that losing health insurance when turning 18 years old increases visits to the ED, reduces preventive care visits with a physician, and increases the usage of private medical services (outof-pocket) for this age group. These results imply a substitution of cheaper medical services for more expensive ones when individuals turn 18 years old in Colombia.