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Insurance coverage and the heterogeneity of health and drug spending in the United States

Gemmill, Marin, Costa-i-Font, Joan ORCID: 0000-0001-7174-7919 and Kanavos, Panos ORCID: 0000-0001-9518-3089 (2006) Insurance coverage and the heterogeneity of health and drug spending in the United States. Geneva Papers on Risk and Insurance: Issues and Practice, 31 (4). pp. 669-691. ISSN 1018-5895

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Identification Number: 10.1057/palgrave.gpp.2510098


The rise in health expenditure in the U.S. has generated interest in the determinants of health expenditure at the micro-level; however, individuals may exhibit differential behaviour across different types of health care. In addition, public and private insurance may have an heterogeneous effect on expenditure. In this paper, we examine the determinants of health expenditure with a multivariate regression model along with controls for insurance choice and unobserved health care utilization. We find age-related effects and evidence of moral hazard related to private insurance, while the primary effect of income on expenditure appears to be through the purchase of insurance. The implications of the study are that: (i) policymakers should be less concerned about the effect of ageing on health expenditure; (ii) drug spending may not be related to the expansion of public insurance coverage; and (iii) income may have a negative impact on most elements of health spending.

Item Type: Article
Official URL:
Additional Information: © 2006 The International Association for the Study of Insurance Economics
Divisions: European Institute
Social Policy
LSE Health
Subjects: R Medicine > RA Public aspects of medicine
Date Deposited: 23 Nov 2009 11:57
Last Modified: 04 Jan 2024 08:45

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