Do Health Insurers Matter for Health Outcomes? Evidence from a Large Natural Experiment in Colombia

While the relationship between health insurance coverage and health outcomes has been extensively studied, there is limited evidence on which specific features of insurance matter. We address this gap by leveraging the abrupt termination of Colombia’s largest health insurer and examining the spillover effects on patients who were not enrolled with the terminated insurer. The termination caused a 10% decrease in the breadth of provider networks among incumbent insurers and a 20% increase in mortality rates. We show two mechanisms drove the change in mortality: increased congestion stemming from the surge of enrollees at incumbent insurers and reduced provider network breadth. Insurers narrowed their networks by excluding higher-quality providers that served sicker, more expensive patients, whoin turn died at much higher rates than their counterparts. Findings suggest insurers play a key role in patient health through their provider networks.