An Examination of the Intracorrelation of Family Health Insurance

Marion Aouad (UC Irvine)

The onset of an individual-level health shock may result in non-trivial health insurance consequences for the family. This is because of the structure of US health care markets, where health insurance is often bundled at the family level and provided through an employer. Yet, relatively little is known about how the structure of bundled health insurance may amplify the effects of an individual-level health shock. Filling this gap, this study uses a large US medical claims dataset to examine how an isolated appendicitis emergency affects families’ health insurance outcomes.  Using coarsened exact matching and stacked difference-in-differences, this study finds that an acute appendicitis emergency leads to a 7-14 percent decreased likelihood of leaving the current health insurance network and health plan. This is primarily driven by reduced rates of job switching by the plan’s primary beneficiary. Furthermore, switching frictions stemming from the non-portability of health insurance products may contribute to the observed "health plan lock."