The Impact of Health Insurance Status on Treatment Intensity and Health Outcomes

This paper uses the abrupt changes in health insurance coverage at age 65 arising from the Medicare program eligibility rules to evaluate the impact of insurance status on treatment intensity and health outcomes. Drawing from several million hospital discharge records for the State of California, we begin by identifying a subset of patients who are admitted through the emergency room for non-deferrable conditions—diagnoses with the same daily admission rates on weekends and weekdays. Among this subset of patients there is no discernable rise in the number of admissions at age 65, suggesting that the severity of illness is similar for patients who are just under 65 and those who are just over 65. The fraction of patients in this group who lack health insurance, however, falls sharply at age 65, while the proportion with Medicare as their primary insurer rises. Tracking health-related outcomes of the group, we find significant increases in treatment intensity at the age 65 barrier, including increases in the number of procedures performed, and total list charges. We also find a rise in the probability that patients are transferred to other units within the same hospital, coupled with a reduction in the probability of discharge to home. Finally, we estimate a drop in the rate of re-admission within one month of the initial discharge. *University of California Berkeley, University of California Santa Cruz, and Rand Corporation, respectively. We thank the California Department of Health Services for providing us with the data used in the paper. Preliminary draft: Please do not cite without permission.