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Employee Choice and the Demand for Health Insurance Coverage: Evidence from Random Coefficients Models

Author

Listed:
  • Kattih Nour

    (Department of Economics and Finance, Middle Tennessee State University, 1301 E. Main StreetMurfreesboro, TN 37132, USA)

  • Mixon Franklin G.

    (Center for Economic Education, Columbus State University, 4225 University Avenue, Columbus, GA31907-5679, USA)

Abstract

This study examines the effects of deductibles, employee premium contributions, and the availability of tax-sheltered health savings accounts on employee selection into health insurance plans after passage of the Affordable Care Act, and particularly after implementation of the individual mandate. In doing so, a utility-based structural demand model is applied to market-level macro data from the Kaiser Family Foundation and the Health Research Educational Trust. Results from random coefficients models indicate that for an average consumer, price sensitivity for employer-sponsored health insurance plans varies by age, wage, health condition and gender. Employees who are older, obese, or female are less sensitive to deductibles and premiums than younger and healthier employees, or male employees. These findings suggest that high deductible health plans that combine a tax-sheltered account with higher deductibles will negatively impact the utility of older employees and females as compared to younger employees and males.

Suggested Citation

  • Kattih Nour & Mixon Franklin G., 2020. "Employee Choice and the Demand for Health Insurance Coverage: Evidence from Random Coefficients Models," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(2), pages 1-13, April.
    • Handle: RePEc:bpj:bejeap:v:20:y:2020:i:2:p:13:n:16
    DOI: 10.1515/bejeap-2019-0153
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    Cited by:

    1. Ling Tian & Haisong Dong, 2023. "Study on the Dynamic Relationship between Chinese Residents’ Individual Characteristics and Commercial Health Insurance Demand," IJERPH, MDPI, vol. 20(6), pages 1-20, March.

    More about this item

    Keywords

    health insurance; employee benefits; demand for health insurance; random coefficients model;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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