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Does health insurance decrease out-of-pocket health expenses?

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  • Jonathan Edward Leightner

    (Augusta University)

Abstract

Some researchers have found that health insurance increases out-of-pocket heath expenses while other researchers have found the opposite. I estimate the change in per capita out-of-pocket health expenses verses per capita health insurance (dOOPHE/dinsurance) for 44 countries using a statistical technique that uses the vertical position of observations to capture the effects of omitted variables. This technique produces a separate dOOPHE/dinsurance for every observation which makes it possible to see how dOOPHE/dinsurance varies between countries and over time due to omitted variables. Between 2005 and 2017, I find that dOOPHE/dinsurance varies from a low of 0.081 in France in 2005 to 0.950 in India in 2005; however, by 2015 India's dOOPHE/dinsurance had fallen to 0.752. These estimates are for what happens on average in each country in each year, and, thus, do not show the catastrophic effects on those hit by the highest OOPHE. These results are consistent with health insurance reducing the OOPHE associated with any given visit to a medical facility; however, health insurance increasing the number of visits to medical facilities can result in total OOPHE increasing. Designation : Empirical

Suggested Citation

  • Jonathan Edward Leightner, 2019. "Does health insurance decrease out-of-pocket health expenses?," Economics Bulletin, AccessEcon, vol. 39(4), pages 2589-2594.
  • Handle: RePEc:ebl:ecbull:eb-19-00842
    as

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    References listed on IDEAS

    as
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    2. Eugene Kouassi & Gnoudentiho G Silue & Oluyele Akinkugbe & Jean Marcelin B Brou, 2017. "Health expenditures and Income with Nonstationary Panel Data: Evidence from ECOWAS Member Countries," Economics Bulletin, AccessEcon, vol. 37(3), pages 2198-2218.
    3. Finkelstein, Amy & McKnight, Robin, 2008. "What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending," Journal of Public Economics, Elsevier, vol. 92(7), pages 1644-1668, July.
    4. Keshar M. Ghimire, 2018. "Impact of children's health insurance benefit on labor supply of adults: evidence from newly arrived immigrants," Economics Bulletin, AccessEcon, vol. 38(1), pages 234-247.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Health Insurance; Out-of-pocket Health Expenses; RTPLS.;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • D1 - Microeconomics - - Household Behavior

    Statistics

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