NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Household Demand for Employer-Based Health Insurance

Jean Marie Abraham, William B. Vogt, Martin Gaynor

NBER Working Paper No. 9144
Issued in September 2002
NBER Program(s):   HC

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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Document Object Identifier (DOI): 10.3386/w9144

Published: Abraham, Jean Marie, William B. Vogt, William B., and Martin S. Gaynor. "How Do Households Choose Their Employer-Bases Health Insurance?" Inquiry 43, 4 (Winter 2006-2007): 315-32.

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