No-claim refunds and healthcare use
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.
Avdic, D., S. Decker, M. Karlsson and M. Salm (2024), No-claim refunds and healthcare use. Journal of Public Economics, 230, 105061