title: Does Full Insurance Increase the Demand for Health Care?
abstract: We estimate the causal impact of having full health insurance on healthcare expenditures. We take advantage of a unique quasi-experimental setup in which deductibles and co-payments were zero in a managed care plan and nonzero 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 nonlinear 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. Copyright © 2015 John Wiley & Sons, Ltd.
authors.affiliation: Department of Health Sciences and Health Policy, University of Lucerne, Lucerne, Switzerland. stefan.boes@unilu.ch.
authors.forename: Stefan
authors.initials: S
authors.lastname: Boes
authors.affiliation: Department of Economics, University of Bern, Bern, Switzerland.
authors.forename: Michael
authors.initials: M
authors.lastname: Gerfin
mesh_terms: D003669:Deductibles and Coinsurance / Q000706:statistics & numerical data*; D005260:Female; D005102:Health Expenditures; D006301:Health Services Needs and Demand; D006801:Humans; D019458:Insurance Coverage / Q000706:statistics & numerical data*; D007348:Insurance, Health / Q000706:statistics & numerical data*; D008297:Male; D008329:Managed Care Programs / Q000706:statistics & numerical data*; D008875:Middle Aged; D017059:Models, Econometric
keywords: changes-in-changes; cost sharing; healthcare expenditures; managed care; price elasticity; quasi-experiment