Controlling Health Care Costs through Limited Network Insurance Plans: Evidence from Massachusetts State Employees
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Gruber_Controlling health.pdf
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608.42 KB
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Author(s)
Gruber, Jonathan
McKnight, Robin
Date Issued
May 2016
Journal
American Economic Journal: Economic Policy
Citation
Gruber, Jonathan, and Robin McKnight. “Controlling Health Care Costs through Limited Network Insurance Plans: Evidence from Massachusetts State Employees†.” American Economic Journal: Economic Policy 8, no. 2 (May 2016): 219–250. © 2017 American Economic Association
Version
Final published version
Abstract
We investigate the impact of limited network insurance plans in the context of the Massachusetts Group Insurance Commission (GIC), the insurance plan for state employees. Our quasi-experimental analysis examines the introduction of a major financial incentive to choose limited network plans that affected a subset of GIC enrollees. We find that enrollees are very price sensitive in their decision to enroll in limited network plans. Those who switched spent almost 40 percent less on medical care. This reflects reductions in the quantity of services and prices paid per service. The spending reductions came from specialist and hospital care, while spending on primary care rose. (JEL G22, H75, I11, I13, J45)
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
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/pol.20140335
