The Effect of Health Insurance Coverage on the Use of Medical Services
Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. Most studies cannot determine whether the large differences in healthcare utilization between the insured and the uninsured are due to insurance status or to other unobserved differences between the two groups. In this paper, 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. Using the National Health Interview Survey (NHIS) and a census of emergency department records and hospital discharge records from seven states, we find that aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that not having insurance leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. The drop in ED visits and inpatient admissions is due entirely to reductions in the care provided by privately owned hospitals, with particularly large reductions at for profit hospitals. The results imply that expanding health insurance coverage would result in a substantial increase in care provided to currently uninsured individuals.
|Date of creation:||Mar 2010|
|Date of revision:|
|Publication status:||published as Michael Anderson & Carlos Dobkin & Tal Gross, 2012. "The Effect of Health Insurance Coverage on the Use of Medical Services," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 1-27, February.|
|Note:||CH HC HE|
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- 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.
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Journal of Health Economics,
Elsevier, vol. 27(6), pages 1567-1581, December.
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- 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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- Amy Finkelstein, 2005.
"The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare,"
NBER Working Papers
11619, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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.
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