Patient Cost-Sharing and Hospitalization Offsets in the Elderly
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Gruber_Patient Cost-Sharing and.pdf
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Author(s)
Chandra, Amitabh
Gruber, Jonathan
McKnight, Robin
Date Issued
March 2010
Journal
American Economic Review
Publisher
American Economic Association
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. © 2010 AEA
Version
Final published version
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.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.100.1.193
