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Many current proposals aimed at encouraging competition in the health sector call for changes in the way employer-paid health insurance premiums are treated for tax purposes, and for a multiple choice of health insurance plans. This report presents an empirical analysis of the demand for supplementary health insurance and examines the potential effects of implementing these proposals. Extensive demand for supplementary insurance may dampen the effectiveness of catastrophic or major risk insurance proposals intended to increase patient cost sharing; the analysis provides estimates of the size of this demand.

This report is part of the RAND Corporation report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

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