Working Paper: NBER ID: w26430
Authors: Kurt J. Lavetti; Thomas DeLeire; Nicolas R. Ziebarth
Abstract: The ACA requires insurers to provide cost-sharing reductions (CSRs) to low-income consumers on the marketplaces. We link 2013-2015 All-Payer Claims Data to 2004-2013 administrative hospital discharge data from Utah and exploit policy-driven differences in the value of CSRs that are solely determined by income. We find that enrollees with lower cost sharing have higher levels of health care spending, controlling for past health care use. We estimate the demand elasticity of total health care spending to be -0.10, but find larger elasticities for emergency room care, lifestyle drugs, and low-value care. We also find positive cross-price elasticities between outpatient and inpatient care.
Keywords: Affordable Care Act; Cost-Sharing Reductions; Healthcare Spending; Low-Income Enrollees
JEL Codes: H24; H41; H43; H51; I11; I18; J32; J33; J68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Cost-sharing reductions (CSRs) (H23) | Healthcare spending (H51) |
| Lower cost-sharing (D16) | Higher levels of healthcare spending (H51) |
| Lower cost-sharing (D16) | Higher emergency room care spending (I11) |
| Lower cost-sharing (D16) | Higher outpatient care spending (I11) |
| Lower cost-sharing (D16) | Higher spending on low-value care (H51) |
| Lower cost-sharing (D16) | Higher spending on high-value care (H51) |
| Demand for outpatient care (I11) | Demand for emergency room care (I11) |