Is better access to insurance bad for your health?

July 14, 2012

More health insurance, more risk-taking? (Christophe Ena | Associated Press)

The whole goal of the individual mandate is to make Americans healthier by increasing access to medical services.

But what if the exact opposite happens: Could the safety net that health insurance provides lead to Americans taking more risks with their health?

It's not completely implausible: There are multiple academic papers that look at a concept called "risk compensation," where individuals make riskier decisions when they perceive their surroundings to be safer. We tend to drive faster, for example, when we wear seat belts. Drivers will drive closer to bicyclists who wear helmets.

Could that happen with health insurance? Miles Kimball recently heard a presentation from economist Isaac Erhlich in which he previewed forthcoming research suggesting that it could:

In his presentation, Isaac points out that there will be the same kind of effect if you require people to have health insurance. They will feel safer in relation to their health, and so will take more risks. For example, a young person who has to pay full price for the visit to the doctor for antibiotics to treat an STD may be more careful to use or insist on a condom. He and his coauthor, Yong Yin, have a theoretical model showing that such effects can be substantial in size.

This wouldn't necessarily play out the same for all 30 million Americans expected to gain insurance. It would, as Kimball explains, probably have the greatest impact on those who have specifically eschewed care when they have gone without coverage:

The effects are different for people who didn’t have health insurance because they were free-riding on the health safety net (such as hospital emergency rooms, charitable organizations, the Hippocratic oath that obligates doctors to help people, etc.) than for people who didn’t have health insurance because they were being careful to do everything possible to stay healthy. The “take more risks” effect is coming primarily from the people who didn’t have health insurance because they are going to do everything possible to stay healthy.

I don't know of any empirical evidence on the association between risk-taking and health insurance (if you do, please do share it). We do however, know a few things about how people use health insurance that could shed some light on what might happen.

We know that people do use more health care when it's less expensive. That's what the RAND Corporation saw in its landmark study on health insurance, which varied the level of cost-sharing in health insurance and measured how that affected health outcomes.

Unfortunately, the RAND study doesn't tell us why those in the "free plan" used more health care. Maybe they were indeed taking more risks, spending nights BMX-biking, and then heading to the doctor when things take a turn for the worst.

Or, perhaps they were just taking advantage of the free benefits they had, not altering their behavior one bit. The RAND data, sadly, did not survey participants on their BMX-biking habits -- or any risk-taking behaviors, for that matter -- so we have no clue.

 

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