Health insurance costs and declining coverage

Thomas Buchmueller () and Robert Valletta

FRBSF Economic Letter, 2006, issue sep29

Abstract: The share of health-care spending in GDP has been rising rapidly in the United States and other advanced industrial countries since at least 1960. As Jones (2005) and others have argued, the rapid increase in the price of medical care likely is demand-driven to a large degree, reflecting the high value that consumers in wealthy countries assign to medical technologies that improve the quality of life and extend its duration. ; A potential flipside to rising health-care costs, however, is declining health-care coverage. As documented in a recent report from the U.S. Census Bureau (DeNavas-Walt et al. 2006), the percentage of uninsured Americans rose in 2005, continuing a trend that started around 2000. The recent decline in overall coverage reflects a longer-term trend towards reduced coverage through employer-sponsored insurance (ESI) plans. This dual pattern of rising prices and declining coverage suggests that some households are opting out of health coverage as its relative price rises. In this Economic Letter, we investigate the trend towards declining insurance coverage, focusing on the recent trends in ESI coverage and costs and underlying changes in employee participation rates. In the conclusion, we use available research results to project long-term coverage declines in response to further cost increases.

Keywords: Medical care, Cost of; Insurance, Health (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.frbsf.org/publications/economics/letter/2006/el2006-25.pdf (application/pdf)
http://www.frbsf.org/publications/economics/letter/2006/el2006-25.html (text/html)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.frbsf.org/publications/economics/letter/2006/el2006-25.html [301 Moved Permanently]--> https://www.frbsf.org/publications/economics/letter/2006/el2006-25.html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfel:y:2006:i:sep29:n:2006-25

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in FRBSF Economic Letter from Federal Reserve Bank of San Francisco Contact information at EDIRC.
Bibliographic data for series maintained by Federal Reserve Bank of San Francisco Research Library ().