Let them have choice

Gains from shifting away from employer-sponsored health insurance and toward an individual exchange

Leemore Dafny, Kate Ho, Mauricio J Varela

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

Most nonelderly Americans purchase health insurance through their employers, which sponsor a limited number of plans. Using a panel dataset representing over ten million insured lives, we estimate employees' preferences for different health plans and use the estimates to predict their choices if more plans were made available to them on the same terms, i.e., with equivalent subsidies and at large-group prices. Using conservative assumptions, we estimate a median welfare gain of 13 percent of premiums. A proper accounting of the costs and benefits of a transition from employer-sponsored to individually-purchased insurance should include this nontrivial gain.

Original languageEnglish (US)
Pages (from-to)32-58
Number of pages27
JournalAmerican Economic Journal: Economic Policy
Volume5
Issue number1
DOIs
StatePublished - Feb 2013

Fingerprint

Health insurance
Employers
Sponsor
Welfare gains
Insurance
Employees
Costs and benefits
Purchase
Median
Health plans
Premium
Subsidies
Large groups

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

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