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By | October 30, 2006

Using data from a national survey of adults in late middle age who are nearing entry into Medicare, Drs. Dor, Sudano, and Baker investigated if the presence of private insurance–compared to being uninsured–contributes to better health status over a period of 4 years. They also wanted to determine if past methods of analyzing this problem underestimated the effect of having insurance. The authors found that 1) traditional methods of estimating the effect of having insurance were small and statistically significant, but biased downward, i.e., underestimated the effect of having insurance; and 2) using two approaches called Òinstrumental variablesÓ and Òtreatment-effects models,Ó alternative estimates yielded up to a six-fold increase in the insurance effect. The authors concluded that prior estimates indeed underestimated the effects of having insurance and that extending insurance coverage to working age adults may result in improved health. Additionally, policies aimed at expanding coverage to this population may lead to improved health at retirement and entry to Medicare, potentially leading to savings. (posted 10/2006)

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