The Effects of Consumer-Directed Health Plans on Health Care Spending

19 Pages Posted: 8 Feb 2010

See all articles by Anthony T. Lo Sasso

Anthony T. Lo Sasso

DePaul University - Department of Economics

Lorens A. Helmchen

The George Washington University

Robert Kaestner

University of Chicago; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Abstract

We use unique data from an insurer that exclusively offers high-deductible, “consumer-directed” health plans to identify the effect of plan features, notably employer contributions to the spending account, on health care spending. Our results show that the marginal dollar contributed by the employer to the spending account is entirely spent on outpatient and pharmacy services. In contrast, out-of-pocket spending was not responsive to the amount the employer contributes to the spending account. Our results represent the first plausibly causal estimates of the components of consumer-driven health plans on health spending. The magnitudes of the effects suggest important health care spending consequences to higher employer contributions to spending accounts. Our findings are most directly relevant to health reimbursement arrangement plan designs, though our results are still of value to health savings account plan designs.

Suggested Citation

Lo Sasso, Anthony T. and Helmchen, Lorens A. and Kaestner, Robert and Kaestner, Robert, The Effects of Consumer-Directed Health Plans on Health Care Spending. Journal of Risk and Insurance, Vol. 77, Issue 1, pp. 85-103, March 2010, Available at SSRN: https://ssrn.com/abstract=1548172 or http://dx.doi.org/10.1111/j.1539-6975.2009.01346.x

Anthony T. Lo Sasso (Contact Author)

DePaul University - Department of Economics ( email )

1 E. Jackson Blvd.
Chicago, IL 60604
United States

Lorens A. Helmchen

The George Washington University ( email )

950 New Hampshire Ave NW
Washington, DC 20052
United States
2029943816 (Phone)
2029943816 (Fax)

Robert Kaestner

University of Chicago ( email )

1155 East 60th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

5 Hanover Square 16th floor
New York, NY 10004
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
627
PlumX Metrics