Inquiry: The Journal of Health Care Organization, Provision, and Financing (May 2006)
Price and the Demand for Nongroup Health Insurance
Abstract
In light of recent interest in tax credits and other price-based incentives to stimulate the purchase of insurance, this study estimates the price elasticity of demand for nongroup health insurance for single workers without access to employer-sponsored insurance. Our premium measure explicitly accounts for two components that have not been examined in previous studies: 1) health status, and 2) the effect of state-level premium rating regulations. We estimate a price elasticity of –.59, which, given the low rate of initial coverage in our sample (16.4%), translates to a small effect on the uninsured.