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Posted to Web: December 01, 2001

Permanent Link: http://www.urban.org/url.cfm?ID=1000339

Recent research has attempted to discern what share of uninsured workers lack coverage due to the absence of an employer sponsored insurance (ESI) offer and what share lack coverage due to a decision to decline an available ESI offer. While most uninsured workers do not have available ESI offers, descriptive evidence clearly indicates that the rate of workers taking up ESI offers has declined since the late 1980s. Central questions in this inquiry are: (1) What is more important in the worker’s decision making— price or health status? (2) Does this relative valuation vary with income? This study uses the National Health Interview Survey (NHIS) and a multivariate analytic framework to answer these questions. Specifically, the study uses premium data and the NHIS’ uniquely detailed information on health status to determine the relative importance of these factors in the worker take-up decision. Overall, the data support the inference that price is more important in the purchase decision than is health status. The exception to this is that high income individuals are not responsive to price in their decision to buy ESI coverage of some type. They were, however, price responsive in their decision to buy a family instead of a single policy, given a decision to buy something. Report to the US Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation; 2001 December.

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