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

  • Michael Anderson
  • Carlos Dobkin
  • Tal Gross

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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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
Contact details of provider: Web page: https://www.aeaweb.org/aej-policy
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  1. 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.
  2. Currie, Janet & Decker, Sandra & Lin, Wanchuan, 2008. "Has public health insurance for older children reduced disparities in access to care and health outcomes?," Journal of Health Economics, Elsevier, vol. 27(6), pages 1567-1581, December.
  3. 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.
  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. 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.
  6. 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.
  7. 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.
  8. 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.
  9. Phillip B. Levine & Robin McKnight & Samantha Heep, 2011. "How Effective Are Public Policies to Increase Health Insurance Coverage among Young Adults?," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 129-56, February.
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