Working Paper: NBER ID: w9144
Authors: Jean Marie Abraham; William B. Vogt; Martin S. Gaynor
Abstract: We use the 1996 Medical Expenditure Panel Survey to estimate a model of household demand for employer-based health insurance, explicitly investigating differences in behavior between households with two potential sources of coverage and those with one source. Own and cross-price elasticities are estimated for three types of health plans, including exclusive provider organizations, any provider organizations, and mixed provider organizations. We find that the premium, family size, income, and wealth significantly affect demand. Our elasticity estimates reveal an overall, small behavioral response to changes in price with respect to health plan switching and take-up. Finally, we discuss the implications of our findings with respect to employer benefit design.
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Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| premiums (G22) | household demand for employer-based health insurance (G52) |
| family size (J12) | household demand for employer-based health insurance (G52) |
| income (E25) | household demand for employer-based health insurance (G52) |
| wealth (D14) | household demand for employer-based health insurance (G52) |
| higher employee contribution (J32) | lower take-up rates (R29) |
| availability of multiple coverage options (G52) | demand for health insurance (G52) |