Type of Publication: Article in Journal

No-claim refunds and healthcare use

Author(s):

Karlsson, Martin; with Avdic, Daniel; Decker, Simon; Salm, Martin

Title of Journal:

Journal of Public Economics

Volume (Publication Date):

230 (2024)

Digital Object Identifier (DOI):

doi:10.1016/j.jpubeco.2023.105061

Citation:

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Abstract

No-claim refunds are cost-control instruments which stipulate a payback agreement contingent on one or more claim-free years. We study how such no-claim refunds affect claiming behavior using claims data from a large German health insurer and a policy that increased the refund size for certain plans. We propose a method to decompose the effect on claims into behavioral and non-behavioral components, and show that individuals responded to the refund policy by reducing claims by eight percent on average. The effect persisted for several years; behavioral responses were stronger for clients with more to gain from the policy; and reductions in claims were not restricted to treatments of questionable medical value.