The Effect of Health Insurance Coverage on the Use of Medical Services

85 Pages Posted: 22 Mar 2010 Last revised: 28 Mar 2021

See all articles by Michael L. Anderson

Michael L. Anderson

U.C. Berkeley - Department of Agricultural and Resource Economics

Carlos Dobkin

University of California, Santa Cruz - Department of Economics

Tal Gross

Columbia University - Department of Health Policy and Management

Date Written: March 2010

Abstract

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.

Suggested Citation

Anderson, Michael L. and Dobkin, Carlos and Gross, Tal, The Effect of Health Insurance Coverage on the Use of Medical Services (March 2010). NBER Working Paper No. w15823, Available at SSRN: https://ssrn.com/abstract=1575377

Michael L. Anderson (Contact Author)

U.C. Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall, MC 3310
Berkeley, CA 94720-3310
United States

Carlos Dobkin

University of California, Santa Cruz - Department of Economics ( email )

Santa Cruz, CA 95064
United States

Tal Gross

Columbia University - Department of Health Policy and Management ( email )

600 West 168th Street, 6th Floor
New York, NY 10032
United States

HOME PAGE: http://www.talgross.com

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