American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Patient Cost-Sharing and Hospitalization Offsets in the Elderly
American Economic Review
vol. 100,
no. 1, March 2010
(pp. 193–213)
Abstract
In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial "offset" effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare. (JEL G22, I12, I18, J14)Citation
Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. 2010. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly." American Economic Review, 100 (1): 193–213. DOI: 10.1257/aer.100.1.193Additional Materials
JEL Classification
- G22 Insurance; Insurance Companies
- I12 Health Production
- I18 Health: Government Policy; Regulation; Public Health
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination