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Does it really make a difference? Health care utilization with two high deductible health care plans

Deductibles are commonly used to tame increasing health care costs. Numerous studies find that higher deductibles reduce health care utilization. In this paper we compare utilization in Switzerland between two health care plans with deductibles of 1,500 CHF and 2,500 CHF (1CHF approx. 1$) per calendar year. While there is a minimum deductible level in Switzerland, individuals are free to increase their deductible and thereby reduce their insurance premium. In order to distinguish between selection and moral hazard we use regional variation in premiums as an instrument. Moreover, we take advantage of a policy change in 2005 that introduced the higher deductible for the first time. The results show that selection leads to considerable differences in utilization between the two groups, while we find no behavioral differences across both groups. If anything health care expenditures are higher for male individuals with the higher deductible, while for females there are no differences between the two deductible levels.

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File URL: http://dx.doi.org/10.3929/ethz-a-010608777
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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 16-404.

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Length: 34 pages
Date of creation: Mar 2016
Handle: RePEc:kof:wpskof:16-404
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  1. Martin Schellhorn, 2001. "The effect of variable health insurance deductibles on the demand for physician visits," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 441-456.
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  6. Aviva Aron-Dine & Liran Einav & Amy Finkelstein & Mark R. Cullen, 2012. "Moral Hazard in Health Insurance: How Important Is Forward Looking Behavior?," NBER Working Papers 17802, National Bureau of Economic Research, Inc.
  7. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
  8. Rainer Winkelmann, 2004. "Health care reform and the number of doctor visits-an econometric analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(4), pages 455-472.
  9. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
  10. Andreas Werblow & Stefan Felder & Peter Zweifel, 2007. "Population ageing and health care expenditure: a school of 'red herrings'?," Health Economics, John Wiley & Sons, Ltd., vol. 16(10), pages 1109-1126.
  11. Haviland, Amelia M. & Eisenberg, Matthew D. & Mehrotra, Ateev & Huckfeldt, Peter J. & Sood, Neeraj, 2016. "Do “Consumer-Directed” health plans bend the cost curve over time?," Journal of Health Economics, Elsevier, vol. 46(C), pages 33-51.
  12. Anthony T. Lo Sasso & Lorens A. Helmchen & Robert Kaestner, 2010. "The Effects of Consumer-Directed Health Plans on Health Care Spending," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 77(1), pages 85-103.
  13. Michael Gerfin & Martin Schellhorn, 2006. "Nonparametric bounds on the effect of deductibles in health care insurance on doctor visits - Swiss evidence," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 1011-1020.
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