Does full insurance increase the demand for health care?
AbstractWe estimate the causal eﬀect of having full health insurance on health care expenditures. We take advantage of a unique quasi-experimental setup in which deductibles and co- payments were zero in a managed care plan, and non-zero in regular insurance, until a policy change forced all individuals with an active plan to cover a minimum amount of their expenses. Using panel data and a non-linear difference-in-differences strategy, we find a demand elasticity of about -0.14 comparing full insurance with the cost-sharing model, and a significant upward shift in the likelihood to generate costs.
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Date of creation: Oct 2013
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Deductibles; health cost; quasi experiment; changes-in-changes;
Other versions of this item:
- Boes, Stefan & Gerfin, Michael, 2013. "Does Full Insurance Increase the Demand for Health Care?," IZA Discussion Papers 7689, Institute for the Study of Labor (IZA).
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-HEA-2013-10-18 (Health Economics)
- NEP-IAS-2013-10-18 (Insurance Economics)
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