Let them have choice: Gains from shifting away from employer-sponsored health insurance and toward an individual exchange

Leemore Dafny, Kate Ho, Mauricio Varela

Research output: Contribution to journalArticle

16 Scopus citations


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
Issue number1
StatePublished - Feb 1 2013


ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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