Inquiry: The Journal of Health Care Organization, Provision, and Financing (May 2006)

Price and the Demand for Nongroup Health Insurance

  • David Auerbach,
  • Sabina Ohri

DOI
https://doi.org/10.5034/inquiryjrnl_43.2.122
Journal volume & issue
Vol. 43

Abstract

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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.