title: Patient Cost-Sharing and Hospitalization Offsets in the Elderly.
abstract: In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial "offset" effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare.
authors.affiliation: Kennedy School of Government, Harvard University, 79 JFK Street, Cambridge, MA 02138, and NBER Amitabh_Chandra@Harvard.Edu.
authors.forename: Amitabh
authors.initials: A
authors.lastname: Chandra
authors.forename: Jonathan
authors.initials: J
authors.lastname: Gruber
authors.forename: Robin
authors.initials: R
authors.lastname: McKnight
mesh_terms: D000368:Aged; D017047:Cost Sharing / Q000191:economics*; D003669:Deductibles and Coinsurance / Q000191:economics*; D006279:Health Maintenance Organizations; D006760:Hospitalization / Q000191:economics* / Q000706:statistics & numerical data; D006801:Humans; D017054:Insurance, Medigap / Q000191:economics; D007356:Insurance, Pharmaceutical Services / Q000191:economics; D006278:Medicare / Q000191:economics; D009819:Office Visits / Q000191:economics / Q000706:statistics & numerical data; D011243:Preferred Provider Organizations; D014481:United States