Worker demand for health insurance in the non-group market

Abstract

This paper examines decisions to purchase individual insurance by workers who do not have employment-based insurance. Using data from the Current Population Survey and the Survey of Income and Program Participation, coupled with prices for a standard insurance product in different market areas, we estimate a price elasticity of -0.3 to -0.4 and an income elasticity of 0.15. Our estimate of the price response raises doubts that even substantial subsidies to the working uninsured would induce many of them to purchase coverage voluntarily.