The effect of health insurance on utilization

Here’s the abstract of The Effect of Health Insurance Coverage on the Use of Medical Services, by Michael Anderson, Carlos Dobkin, and Tal Gross

Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. 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. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions.

In the following chart, you can see the aging out effect around age 19, which coincides with a decrease in ED visits and sharp break in the rate of change in hospitals stays.

A regression-discontinuity analysis focused on age 19 yields the following results.


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