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, the authors estimate a price elasticity of -0.3 to -0.4 and an income elasticity of 0.15. The authors' estimate of the price response raises doubts that even substantial subsidies to the working uninsured would induce many of them to purchase coverage voluntarily.
Originally published in: Journal of Health Economics, v. 14, 1995, pp. 47-63.
This report is part of the RAND Corporation Reprint series. The Reprint was a product of the RAND Corporation from 1992 to 2011 that represented previously published journal articles, book chapters, and reports with the permission of the publisher. RAND reprints were formally reviewed in accordance with the publisher's editorial policy and compliant with RAND's rigorous quality assurance standards for quality and objectivity. For select current RAND journal articles, see External Publications.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.