We investigate the impact of limited network insurance plans in the
context of the Massachusetts Group Insurance Commission (GIC), the
insurance plan for state employees. Our quasi-experimental analysis
examines the introduction of a major financial incentive to choose
limited network plans that affected a subset of GIC enrollees. We find
that enrollees are very price sensitive in their decision to enroll in
limited network plans. Those who switched spent almost 40 percent
less on medical care. This reflects reductions in the quantity of services
and prices paid per service. The spending reductions came from
specialist and hospital care, while spending on primary care rose.
(JEL G22, H75, I11, I13, J45)
Gruber, Jonathan, and Robin McKnight.
"Controlling Health Care Costs through Limited Network Insurance Plans: Evidence from Massachusetts State Employees."
American Economic Journal: Economic Policy,
Insurance; Insurance Companies; Actuarial Studies
State and Local Government: Health; Education; Welfare; Public Pensions
Analysis of Health Care Markets
Health Insurance, Public and Private
Public Sector Labor Markets