Reductions in out-of-pocket prices and forward-looking moral hazard in health care demand

•Policy-based evidence on age thresholds in health insurance contracts.•Development and estimation of a kinked Donut Regression Discontinuity design.•Older adults delay primary care visits awaiting the copayment elimination.•No evidence that the delayed visits lead to negative health consequences.•The Swedish copayment elimination at age 85 does not have its intended effect. Little is known about how patients dynamically respond to a forthcoming reduction in health care out-of-pocket prices. Using a kinked Donut Regression Discontinuity design with kinks entering and exiting the donut, we evaluate a Swedish cost-sharing policy, where primary care out-of-pocket prices were eliminated at age 85. We find evidence of forward-looking moral hazard with older adults delaying primary care visits up to four months before the out-of-pocket elimination and shifting these visits until shortly after. These health care delays are driven by non-urgent care: non-physician visits, planned visits and follow up visits. We find no evidence of severe negative health effects in the short-term as a result of the delay. Contrary to our finding of forward-looking behavior with respect to out-of-pocket prices, we do not find evidence of typical moral hazard, as we do not find a persistent increase in primary health care use after the copayment elimination.