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A Panel Analysis of the Effects of a Consumer Directed Health Insurance Plan

32 Pages Posted: 9 Jan 2011 Last revised: 18 Jan 2011

Gurjeet Guram

Harvard Medical School

Melayne Morgan McInnes

University of South Carolina - Darla Moore School of Business

Orgul D. Ozturk

University of South Carolina - Department of Economics

Date Written: January 9, 2011

Abstract

We investigate the introduction of a Consumer Directed Health Plan (CDHP) in 2005 at a large, self-insured employer. Our relatively long panel enables us to observe utilization and spending for two years prior and four years after the introduction of the CDHP, enabling us to control for unobserved factors that affect both enrollment and utilization. We can also look for evidence of "pent up" demand or "stocking up" which might bias estimates of the effect of CDHPs in shorter panels. The length of our panel also allows us to determine whether the effects of CDHP enrollment persist over time. The CDHP we study has greater potential to shift spending than those studied in the prior literature because it is associated with an employee-funded health savings account (rather than a pre-Medicare Modernization Act employer-funded reimbursement account). However, we find that CDHP enrollment has little effect on utilization or spending.

Keywords: Health insurance, Consumer Directed Health Plans, Health Care Expenditure, Health Care Utilization

JEL Classification: I11, I18

Suggested Citation

Guram, Gurjeet and McInnes, Melayne Morgan and Ozturk, Orgul D., A Panel Analysis of the Effects of a Consumer Directed Health Insurance Plan (January 9, 2011). Available at SSRN: https://ssrn.com/abstract=1737491 or http://dx.doi.org/10.2139/ssrn.1737491

Gurjeet Guram

Harvard Medical School ( email )

250 Longwood Avenue
Boston, MA 02115
United States

Melayne Morgan McInnes

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States

Orgul D. Ozturk (Contact Author)

University of South Carolina - Department of Economics ( email )

701 Main Street
Columbia, SC 29208
United States

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