Public Health Insurance and Healthcare Utilisation Decisions of Young Adults

Abstract

This paper investigates the impact of a dependent coverage age-eligibility rule on young adults' health and healthcare utilisation under Indonesia's National Health Insurance (NHI) program. Employing a regression discontinuity design, analysis of the NHI administrative data documents a significant 14.6 to 20.9 percentage points drop in coverage among young adults at age 21, the age cut-off imposed by the rule. Using a large nationally representative household survey, this paper shows that the loss of insurance coverage does not change young adults' health status but markedly decreases the utilisation of outpatient care among those who are ill. Specifically, there is an abrupt 5.3 to 8.4 percentage points reduction in the probability of young adults having any outpatient visit in the past month, primarily driven by lower utilisation of primary care services. The study also finds an increased likelihood of self-treatment and the use of traditional healers, indicating a substitution effect. Further analysis shows a larger impact on those who are poor, less educated, and live in regions with higher healthcare costs.