Effects of Price Regulations on Service Utilization and Public Insurance Costs: Evidence from Telehealth Parity Laws

Abstract: This study explores Telehealth Parity Laws (TPLs) and their heterogeneous treatment effects by policy type on outpatient utilization and Medicare costs, considering broadband and licensure infrastructure. State-specific legislative framings create varied Price (physician reimbursement) and Cost (consumer expense) control combinations within a quasi-experimental design. Partial equilibrium causal estimates reveal negligible impacts on Medicare enrollment, indicating that Medicare cost shifts stem purely from outpatient utilization changes. Broadband access correlates with increased preventable hospital stays but lower Medicare costs and enrollment. Additionally, the Interstate Licensure Compact increases enrollment among the aged and disabled, possibly addressing previously unmet demand for healthcare services.