Insurance Coverage and the Heterogeneity of Health and Drug Spending in the United States

Abstract

The rise in health expenditure in the U.S. has generated interest in the determinants of health expenditure at the micro-level; however, individuals may exhibit differential behaviour across different types of health care. In addition, public and private insurance may have an heterogeneous effect on expenditure. In this paper, we examine the determinants of health expenditure with a multivariate regression model along with controls for insurance choice and unobserved health care utilization. We find age-related effects and evidence of moral hazard related to private insurance, while the primary effect of income on expenditure appears to be through the purchase of insurance. The implications of the study are that: (i) policymakers should be less concerned about the effect of ageing on health expenditure; (ii) drug spending may not be related to the expansion of public insurance coverage; and (iii) income may have a negative impact on most elements of health spending.

Healthcare consumption after a change in health insurance coverage: a French quasi-natural experiment

“…Our results are generally consistent with the literature on moral hazard in contract theory, according to which individuals may consume more if they are insured as they do not have to bear the full financial consequences of their healthcare consumption [38]. Indeed, we generally observed higher levels of consumption for the types of care that were better reimbursed with EC, except for hospital care, which is an exception typically observed in field studies [10,23,[39][40][41]. In particular, the rise in consumption primarily concerned dental prostheses and Table 2 except any dependent spouse; b T0: before = 2 years prior, after = 1 year prior; c T1: before = 1 year prior, after = 1 year after; d T2: before = 1 year prior, after = 2 years after; e T3: before = 2 years prior, after = 1 year after; f T4: before = 2 years prior, after = 2 years after; g Including dental consultations.…”

“…Nonetheless, voluntary complementary health insurance (CHI) may coexist with the NHI, most often to supplement reimbursements from the NHI, when the NHI does not cover the entire cost. This may somewhat distort the results found in the US, showing that benefiting from health insurance increases the probability of seeking care [8,10,22,23], the frequency of care [22,[24][25][26][27], and the extent of healthcare expenditure [8,23,24,26,28].…”

Health systems futures: The challenges of technology, prevention and insurance

“…Indeed, the introduction of new treatments, primarily new drugs and the dissemination of knowledge and information on how to prevent certain conditions and surgical procedures in providing care, are large contributors to health care spending [18,22,24]. Insofar as new solutions to old problems are achieved, newer problems are identified.…”