title: Subsidies and the demand for individual health insurance in California.
abstract: OBJECTIVE
  To estimate the effect of changes in premiums for individual insurance on decisions to purchase individual insurance and how this price response varies among subgroups of the population.
  
  
  METHODS
  Survey responses from the Current Population Survey (http://www.bls.census.gov/cps/cpsmain.htm), the Survey of Income and Program Participation (http://www.sipp.census.gov/sipp), the National Health Interview Survey (http://www.cdc.gov/nchs/nhis.htm), and data about premiums and plans offered in the individual insurance market in California, 1996-2001.
  
  
  METHODS
  A logit model was used to estimate the decisions to purchase individual insurance by families without access to group insurance. This was modeled as a function of premiums, controlling for family characteristics and other characteristics of the market. A multinomial model was used to estimate the choice between group coverage, individual coverage, and remaining uninsured for workers offered group coverage as a function of premiums for individual insurance and out-of-pocket costs of group coverage.
  
  
  RESULTS
  The elasticity of demand for individual insurance by those without access to group insurance is about -.2 to -.4, as has been found in earlier studies. However, there are substantial differences in price responses among subgroups with low-income, young, and self-employed families showing the greatest response. Among workers offered group insurance, a decrease in individual premiums has very small effects on the choice to purchase individual coverage versus group coverage.
  
  
  CONCLUSIONS
  Subsidy programs may make insurance more affordable for some families, but even sizeable subsidies are unlikely to solve the problem of the uninsured. We do not find evidence that subsidies to individual insurance will produce an unraveling of the employer-based health insurance system.
authors.affiliation: RAND, 1200 South Hayes St., Arlington, VA 22202-5050, USA.
authors.forename: M Susan
authors.initials: MS
authors.lastname: Marquis
authors.forename: Melinda Beeuwkes
authors.initials: MB
authors.lastname: Buntin
authors.forename: José J
authors.initials: JJ
authors.lastname: Escarce
authors.forename: Kanika
authors.initials: K
authors.lastname: Kapur
authors.forename: Jill M
authors.initials: JM
authors.lastname: Yegian
mesh_terms: D000328:Adult; D002140:California; D003657:Decision Making; D005190:Family; D005249:Fees and Charges; D005380:Financing, Government; D005382:Financing, Personal; D006264:Health Benefit Plans, Employee / Q000191:economics; D006304:Health Status; D006801:Humans; D007348:Insurance, Health / Q000191:economics* / Q000706:statistics & numerical data*; D016015:Logistic Models; D017057:Medically Uninsured; D008962:Models, Theoretical; D012959:Socioeconomic Factors