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The Impact of Provider Payments on Health Care Utilization of Low-Income Individuals: Evidence from Medicare and Medicaid

Author

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  • Marika Cabral
  • Colleen Carey
  • Sarah Miller

Abstract

Provider payments are the key determinant of insurance generosity within many health insurance programs covering low-income populations. This paper analyzes a large, federally mandated provider payment increase for primary care services provided to low-income elderly and disabled individuals. Using comprehensive administrative data, we leverage variation across beneficiaries and providers in the policy-induced payment increase in difference-in-differences and triple differences research designs. We find the payment increase led to a 6 percent increase in the targeted services for eligible beneficiaries, implying a payment elasticity of 1.2, and decreased the fraction of low-income beneficiaries with no primary care visit in a year by 9 percent.

Suggested Citation

  • Marika Cabral & Colleen Carey & Sarah Miller, 2025. "The Impact of Provider Payments on Health Care Utilization of Low-Income Individuals: Evidence from Medicare and Medicaid," American Economic Journal: Economic Policy, American Economic Association, vol. 17(1), pages 106-143, February.
    • Handle: RePEc:aea:aejpol:v:17:y:2025:i:1:p:106-43
    DOI: 10.1257/pol.20220775
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    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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