Health insurance choices in two-worker households: determinants of double coverage

Understanding how households make health insurance choices is of critical importance in evaluating issues of equity and efficiency in health care markets. We consider a largely neglected aspect of such decision making: the decision of families with two working spouses to obtain double coverage. Using data from the 1987 National Medical Expenditure Survey, we find that household decisions to obtain double coverage are especially sensitive to a couple's out-of-pocket premium costs. Our analysis also reveals that households with double coverage have more generous insurance, as reflected in their higher coverage rates for specific types of benefits. We also demonstrate that the presence of duplicate health benefits in double-covered households is not random, possibly reflecting a systematic attempt by working spouses to obtain more extensive coverage.