Losing insurance and behavioral health inpatient care: Evidence from a large-scale Medicaid disenrollment
We study the effects of losing insurance on behavioral health – defined as mental health and substance use disorder (SUD) – on community hospitalizations. We leverage variation in public insurance coverage eligibility offered by a large-scale and unexpected Medicaid disenrollment in Tennessee. Losing insurance did not influence behavioral healthcare hospitalizations. Mental illness hospitalization financing was partially shifted to other forms of insurance while SUD treatment financing shifted entirely to patients. Combining our findings with previous work on public insurance gains suggests that demand for behavioral healthcare services is asymmetric: service use increases following a gain but does not decline after a loss. We are the first to document this finding. We also investigate the implications of reliance on data that is not representative at the level of treatment and propose a possible solution.
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Document Object Identifier (DOI): 10.3386/w25936