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Examining the Marginal Access Value of Private Health Insurance

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  • Rexford E. Santerre

Abstract

According to a new theory advanced by Nyman (1999, 2003), an important access motivation underlies the demand for health insurance. However, little empirical research has attempted to quantify and explain changes in the access value of health insurance. By assuming the demand for health insurance is derived from the demand for good health, this article shows mathematically that the marginal access value of private health insurance can be reasonably indexed by dividing the price of health insurance by a composite measure of medical prices. For the period from 1960 through 2002, national data for the United States suggests that the marginal access value of private health insurance has tended to increase over time. Based upon multiple regression analysis, marginal access value is shown to have increased over time in response to rising income, more generous benefit coverage, new medical technologies, and, in recent years, the backlash against health maintenance organizations (HMOs). In addition, expansions in the Medicaid program are shown to have slowed the growth of the marginal access value of private health insurance.

Suggested Citation

  • Rexford E. Santerre, 2006. "Examining the Marginal Access Value of Private Health Insurance," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 9(1), pages 53-62, March.
    • Handle: RePEc:bla:rmgtin:v:9:y:2006:i:1:p:53-62
    DOI: j.1540-6296.2006.00084.x
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    File URL: https://doi.org/10.1111/j.1540-6296.2006.00084.x
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    References listed on IDEAS

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    1. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 391-430.
    2. Melissa A. Thomasson & Jaret Treber, 2004. "From Home to Hospital: The Evolution of Childbirth in the United States, 1927-1940," NBER Working Papers 10873, National Bureau of Economic Research, Inc.
    3. Phillips, P.C.B., 1986. "Understanding spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 33(3), pages 311-340, December.
    4. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    5. Nyman, John A., 1999. "The value of health insurance: the access motive," Journal of Health Economics, Elsevier, vol. 18(2), pages 141-152, April.
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    Cited by:

    1. Rexford E. Santerre & James I. Hilliard, 2009. "The Health Economy and Health Insurance Research in the JRI," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 12(1), pages 67-79, March.

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