Does Moving to a System with a More Generous Public Health Insurance Increase Medical Care Consumption?

Abstract

We evaluate the impact of reimbursement rates on health expenditures, using a natural experiment. For historical reasons, reimbursement rates of public health insurance are higher in the French region Alsace Moselle than in other French regions. For both systems, affiliation is compulsory. Individuals moving between Alsace-Moselle and the rest of France undergo an exogenous change in reimbursement rates. We use a difference-in-difference method on a panel datasets of individuals. Our treatment group consists of individuals changing systems, our control group consists of individuals who move between other French regions. We study the impact of reimbursement rates on a broad range of health care expenditures: for dentist and doctor visits, drug consumption, and sickness absenteeism. We find heterogeneous impacts of reimbursement rates on those items. Overall, higher public reimbursement rates do not lead to an increase in spending for medical care.