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Dynamics of Consumer Responses to Medical Price Changes
Norihiro Komura
Shun-ichiro Bessho
蝌蚪网 Review: Insights (Forthcoming)
Abstract
How individuals respond to coinsurance rates is fundamental
for insurance market design, but most existing estimates
speak only to short-run responses. We exploit a unique policy
experiment that increased the coinsurance rate some elderly
individuals face when they are aged 70-74 but not before or
after. Higher coinsurance rates have an immediate and persistent
effect on healthcare expenditure, and a sizable share
of this effect persists after age 75. We find no evidence that
higher coinsurance rates affect health. These results suggest
healthcare utilization depends on dynamic factors other than
health stock, such as habits.
