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Abstract
As policymakers consider expanding insurance coverage for individuals infected with human immunodeficiency virus (HIV), it is useful to ask if insurance has any affect on health outcomes and, if so, whether its magnitude has changed with recent efficacious but expensive treatments. By using data from a nationally representative cohort of HIV-infected (HIV+) persons receiving regular medical care, we estimate the impact of insurance on mortality in this population. A naïve single-equation model confirms the perverse result found by others in the literature–that insurance increases the probability of death for HIV+ patients. We attribute this finding to a correlation between unobserved health status and insurance status in the mortality equation for two reasons. First, the eligibility rules for Medicaid and Medicare require HIV+ patients to demonstrate a disability, almost always defined as advanced disease, to qualify. Second, if unobserved health status is the cause of the positive correlation, then including measures of HIV+ disease as controls should mitigate the effect. Including measures of immune function (CD4 lymphocyte counts) reduces the effect size by approximately 50%, although it does not change sign. To deal with this correlation, we develop a two-equation parametric model of both insurance and mortality. The effect of insurance on mortality is identified through the judicious use of state policy variables as instruments (variables related to insurance status but not mortality, except through insurance). The results from this model indicate that insurance does have a beneficial effect on outcomes, lowering the probability of 6-month mortality by 71% at baseline and 85% at follow-up. The larger effect at followup can be attributed to the recent introduction of effective therapies for HIV infection, which have magnified the returns to insurance for HIV+ patients (as measured by mortality rates).
