Working Paper: NBER ID: w16978
Authors: Alan B. Krueger; Ilyana Kuziemko
Abstract: Most existing work on the price elasticity of demand for health insurance focuses on employees' decisions to enroll in employer-provided plans. Yet any attempt to achieve universal coverage must focus on the uninsured, the vast majority of whom are not offered employer-sponsored insurance. In the summer of 2008, we conducted a survey experiment to assess the willingness to pay for a health plan among a large sample of uninsured Americans. The experiment yields price elasticities substantially greater than those found in most previous studies. We use these results to estimate coverage expansion under the Affordable Care Act, with and without an individual mandate. We estimate that 39 million uninsured individuals would gain coverage and find limited evidence of adverse selection.
Keywords: health insurance; uninsured Americans; willingness to pay; Affordable Care Act; survey experiment
JEL Codes: H51; I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| premium prices (D49) | enrollment decisions (I23) |
| reduction in premium prices (G52) | increase in enrollment (I23) |
| $2000 annual premium (G52) | 39 million gaining coverage (I13) |
| removal of individual mandate (G52) | 7 to 12 million fewer gaining coverage (I13) |
| price changes (P22) | willingness to pay (D11) |
| traditional estimates (C51) | underestimate true demand among uninsured (G52) |