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Does Full Insurance Increase the Demand for Health Care?

Stefan Boes () and Michael Gerfin

No 7689, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We 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.

Keywords: deductibles; health cost; quasi experiment; changes-in-changes (search for similar items in EconPapers)
JEL-codes: I11 C14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ias
Date: 2013-10
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Related works:
Journal Article: Does Full Insurance Increase the Demand for Health Care? (2016) Downloads
Working Paper: Does full insurance increase the demand for health care? (2013) Downloads
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