Health Risk, Income, and Employment-Based Health Insurance

M. Kate Bundorf, Bradley Herring and Mark Pauly

No 11677, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: While many believe that an individual's health plays an important role in both their willingness and ability to obtain health insurance in the employment-based setting, relatively little agreement exists on the extent to which health status affects coverage rates, particularly for those with lower incomes. In this paper, we examine the relationship between health risk and the purchase of group health insurance and whether that relationship differs by a person's income and whether they obtain coverage in the small, medium, or large group market. Using the panel component of the 1996-2002 Medical Expenditure Panel Survey (MEPS), we find that health risk is positively associated with private health insurance across the different markets, and that this positive relationship is stronger for low and middle income people, particularly in the large group market. Our results are consistent with the existence of adverse selection in the group market in the form of low rates of coverage among low risks due to an absence of risk rating of premiums. We conclude that pooled premiums for low risks, particularly those with low incomes, may represent a more important financial barrier to coverage in voluntary group insurance than high premiums for high risks.

JEL-codes: I1 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-hea and nep-ias
Note: EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as M. Kate Bundorf & Bradley Herring & Mark V. Pauly, 2010. "Health Risk, Income, and Employment-Based Health Insurance," Forum for Health Economics & Policy, Berkeley Electronic Press, vol. 13(2).

Downloads: (external link)
http://www.nber.org/papers/w11677.pdf (application/pdf)

Related works:
Journal Article: Health Risk, Income, and Employment-Based Health Insurance (2010)
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:nbr:nberwo:11677

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11677

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().