The Effect of Health Insurance Coverage on the Use of Medical Services.” National Bureau of Economic Research Working Paper 15823

Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. We exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents ’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpa-tient services. Aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that uninsured status leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. (JEL G22, I11, I18) Over one-quarter of nonelderly adults in the United States lacked health insur-ance at some point in 2007 (Schoen et al. 2008). A large body of research documents a strong association between insurance status and particular patterns of health care utilization. The uninsured are less likely to consume preventative care such as diagnostic exams and routine checkups (Ayanian et al. 2000). They are more likely to be hospitalized for conditions that—if treated promptly—do not requir