Subsidized Health Insurance and Healthcare Utilization: evidence from a large-scale field experiment

Raf van Gestel¹ (with Diana de Graeve², Tim Goedemé², Hervé Avalosse³, Bram Peters²)

1 Erasmus School of Economics Rotterdam

2 University of Antwerp

3 Mutualité Chrétienne-Christelijke Mutualiteit, Belgium


In this paper we evaluate the effect of subsidized cost-sharing on healthcare utilization with a randomized experiment involving more than 12.000 households. Belgian national legislation obliged all health insurers to contact potentially eligible low-income households to apply for subsidized insurance. The randomized timing of sending a letter and flyer serves as an instrument to evaluate the effect of subsidized cost-sharing, the system of Increased Reimbursement (IR), on healthcare utilization. We find limited evidence for consumptive responses to IR. In addition, beneficiaries do not spend significantly less on healthcare because of an out-of-pocket maximum on expenditures.