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Price and the demand for nongroup health insurance
1Health and Human Resources Division, Congressional Budget Office, USA. David.auerbach@cbo.gov
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.
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