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Which Price is Right: Load or Premium?*

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  • Rexford E Santerre

    (Department of Finance, Center for Healthcare & Insurance Studies, School of Business, University of Connecticut, 2100 Hillside Road, Unit 1041, Storrs, CT 06269-1041, U.S.A.)

Abstract

This paper uses national time series data for the United States to investigate whether changes in the premium or loading fee offer a better explanation for variations in the percentage of the population with private health insurance from 1960 to 2004. The empirical results suggest that premium provides a better measure of price when estimating the demand for health insurance at the extensive margin. The empirical analysis also indicates that the aggregate short-run price and income elasticities of demand for health insurance are fairly close at −0.19 and 0.27, respectively. One implication is that the percentage of the population with private health insurance in the United States should continue to decline in the future if real premiums persistently grow significantly faster than the overall economy. The Geneva Risk and Insurance Review (2008) 33, 90–105. doi:10.1057/grir.2008.10

Suggested Citation

  • Rexford E Santerre, 2008. "Which Price is Right: Load or Premium?*," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 33(2), pages 90-105, December.
    • Handle: RePEc:pal:genrir:v:33:y:2008:i:2:p:90-105
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    Cited by:

    1. Jonas Pendzialek & Dusan Simic & Stephanie Stock, 2016. "Differences in price elasticities of demand for health insurance: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 5-21, January.
    2. Ines Läufer, 2014. "Another perspective on the high uninsured-rate in the USA: Crowding out of long term health insurance by the institutional setting of the U.S. health insurance system," Otto-Wolff-Institut Discussion Paper Series 02/2014, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.

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