The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums

Ronen Avraham, Leemore S Dafny, Max M Schanzenbach

Research output: Working paper / PreprintWorking paper

Abstract

We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce "defensive" healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.
Original languageEnglish
Place of PublicationCambridge, Mass
PublisherNational Bureau of Economic Research
Number of pages1
DOIs
StatePublished - Sep 2009

Publication series

NameNBER working paper series
PublisherNational Bureau of Economic Research
Volumeno. w15371

ULI Keywords

  • uli

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