IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/18023.html
   My bibliography  Save this paper

The Impact of Patient Cost-Sharing on the Poor: Evidence from Massachusetts

Author

Listed:
  • Amitabh Chandra
  • Jonathan Gruber
  • Robin McKnight

Abstract

Greater patient cost-sharing could help reduce the fiscal pressures associated with insurance expansion by reducing the scope for moral hazard. But it is possible that low-income recipients are unable to cut back on utilization wisely and that, as a result, higher cost-sharing will lead to worse health and higher downstream costs through hospitalizations. We use exogenous variation in the copayments faced by low-income enrollees in the Massachusetts' Commonwealth Care program to study these effects. We estimate separate price elasticities of demand by type of service (hospital care, drugs, outpatient care). Overall, we find price elasticities of about -0.15 for this low-income population -- fairly similar to elasticities calculated for higher-income populations in other settings. These elasticities are somewhat larger for the chronically sick and older enrollees. A substantial portion of the decline in utilization comes from some patients cutting back on use completely, but we find no (detectable) evidence of offsetting increases in hospitalizations or emergency department visits in response to the higher copayments, either overall or for the chronically ill in particular.

Suggested Citation

  • Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2012. "The Impact of Patient Cost-Sharing on the Poor: Evidence from Massachusetts," NBER Working Papers 18023, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18023
    Note: EH
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w18023.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tomas J. Philipson & Dana Goldman, 2007. "Integrated Insurance Design in the Presence of Multiple Medical Technologies," American Economic Review, American Economic Association, vol. 97(2), pages 427-432, May.
    2. Buntin, Melinda Beeuwkes & Zaslavsky, Alan M., 2004. "Too much ado about two-part models and transformation?: Comparing methods of modeling Medicare expenditures," Journal of Health Economics, Elsevier, vol. 23(3), pages 525-542, May.
    3. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2010. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly," American Economic Review, American Economic Association, vol. 100(1), pages 193-213, March.
    4. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2010. "Patient Cost Sharing in Low Income Populations," American Economic Review, American Economic Association, vol. 100(2), pages 303-308, May.
    5. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-277, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mariana Carrera & Dana Goldman & Geoffrey Joyce, 2013. "Heterogeneity in Cost-Sharing and Cost-Sensitivity, and the Role of the Prescribing Physician," NBER Working Papers 19186, National Bureau of Economic Research, Inc.
    2. Ed Westerhout & Kees Folmer, 2013. "Why it may hurt to be insured: the effects of capping coinsurance payments," CPB Discussion Paper 239, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Dague, Laura, 2014. "The effect of Medicaid premiums on enrollment: A regression discontinuity approach," Journal of Health Economics, Elsevier, vol. 37(C), pages 1-12.
    4. Douglas Barthold, 2014. "The Effects of Prescription Drug Cost Sharing: Evidence from the Medicare Modernization Act," Working Papers 14C001, Canadian Centre for Health Economics, revised Nov 2014.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chandra, Amitabh & Gruber, Jonathan & McKnight, Robin, 2014. "The impact of patient cost-sharing on low-income populations: Evidence from Massachusetts," Journal of Health Economics, Elsevier, vol. 33(C), pages 57-66.
    2. Katherine Baicker & Sendhil Mullainathan & Joshua Schwartzstein, 2015. "Behavioral Hazard in Health Insurance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1623-1667.
    3. Kurt Lavetti & Thomas DeLeire & Nicolas R. Ziebarth, 2023. "How do low‐income enrollees in the Affordable Care Act marketplaces respond to cost‐sharing?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 90(1), pages 155-183, March.
    4. Ha Trong Nguyen & Luke B Connelly, 2017. "Cost-sharing in health insurance and its impact in a developing country: evidence from a quasi-natural experiment," Bankwest Curtin Economics Centre Working Paper series WP1702, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    5. Dunn, Abe, 2016. "Health insurance and the demand for medical care: Instrumental variable estimates using health insurer claims data," Journal of Health Economics, Elsevier, vol. 48(C), pages 74-88.
    6. Tzu-Ting Yang & Hsing-Wen Han & Hsien-Ming Lien, 2014. "Patient Cost-Sharing and Healthcare Utilization in Early Childhood: Evidence from a Regression Discontinuity Design," Working Papers 14C003, Canadian Centre for Health Economics.
    7. SeungHoon Han & Hosung Sohn, 2023. "The short-term effects of fixed copayment policy on elderly health spending and service utilization: evidence from South Korea’s age-based policy using exact date of birth," International Journal of Health Economics and Management, Springer, vol. 23(2), pages 255-279, June.
    8. Fukushima, Kazuya & Mizuoka, Sou & Yamamoto, Shunsuke & Iizuka, Toshiaki, 2016. "Patient cost sharing and medical expenditures for the Elderly," Journal of Health Economics, Elsevier, vol. 45(C), pages 115-130.
    9. Miyawaki, Atsushi & Noguchi, Haruko & Kobayashi, Yasuki, 2017. "Impact of medical subsidy disqualification on children's healthcare utilization: A difference-in-differences analysis from Japan," Social Science & Medicine, Elsevier, vol. 191(C), pages 89-98.
    10. Chung Jen Yang & Ying Che Tsai & Joseph J. Tien, 2017. "The Impacts of Persistent Behaviour and Cost-Sharing Policy on Demand for Outpatient Visits by the Elderly: Evidence from Taiwan’s National Health Insurance," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(1), pages 31-52, January.
    11. Mingming Xu & Benjamin Bittschi, 2022. "Does the abolition of copayment increase ambulatory care utilization?: a quasi-experimental study in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(8), pages 1319-1328, November.
    12. Wang, Chao & Sweetman, Arthur, 2020. "Delisting eye examinations from public health insurance: Empirical evidence from Canada regarding impacts on patients and providers," Health Policy, Elsevier, vol. 124(5), pages 540-548.
    13. Liran Einav & Amy Finkelstein & Maria Polyakova, 2018. "Private Provision of Social Insurance: Drug-Specific Price Elasticities and Cost Sharing in Medicare Part D," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 122-153, August.
    14. Mark Egan & Tomas Philipson, 2016. "Health Care Adherence and Personalized Medicine," Working Papers 2016-H01, Becker Friedman Institute for Research In Economics.
    15. Reona Hagiwara, 2022. "Welfare Effects of Health Insurance Reform: The Role of Elastic Medical Demand," IMES Discussion Paper Series 22-E-05, Institute for Monetary and Economic Studies, Bank of Japan.
    16. Keane, Michael & Stavrunova, Olena, 2016. "Adverse selection, moral hazard and the demand for Medigap insurance," Journal of Econometrics, Elsevier, vol. 190(1), pages 62-78.
    17. Kurt Lavetti & Kosali Simon, 2018. "Strategic Formulary Design in Medicare Part D Plans," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 154-192, August.
    18. Liran Einav & Amy Finkelstein & Stephen P. Ryan & Paul Schrimpf & Mark R. Cullen, 2013. "Selection on Moral Hazard in Health Insurance," American Economic Review, American Economic Association, vol. 103(1), pages 178-219, February.
    19. Michela Ponzo & Vincenzo Scoppa, 2016. "Cost-Sharing and Use of Health Services in Italy: Evidence from a Fuzzy Regression Discontinuity Design," CSEF Working Papers 440, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.

    More about this item

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:18023. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.