Private health insurance and medical care utilization: evidence from the Medicare population.

This paper examines the impact of supplemental health insurance policy ownership on the use of health care services by the elderly. It employs a data base consisting of Medicare claims data from over 2,000 beneficiaries in six states, actual copies of their supplemental insurance policies, and detailed survey information. The results show that policy ownership has a substantial, positive impact on service usage and costs, particularly for beneficiaries in fair or poor health. The greatest impact was found for policies that provide first-dollar coverage.