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Annual Review of Economics

Volume 10, 2018

What Does (Formal) Health Insurance Do, and for Whom?

Abstract

Health insurance confers benefits to the previously uninsured, including improvements in health, reductions in out-of-pocket spending, and reduced medical debt. However, because the nominally uninsured pay only a small share of their medical expenses, health insurance also provides substantial transfers to nonrecipient parties who would otherwise bear the costs of providing uncompensated care to the uninsured. The prevalence of uncompensated care helps explain the limited take-up of heavily subsidized public health insurance and the evidence that many recipients value formal health insurance at substantially less than the cost to insurers of providing that coverage. The distributional implications of public subsidies for health insurance depend critically on the ultimate economic incidence of the transfers that they deliver to providers of uncompensated care.

Keyword(s): health insurance, JEL H22, JEL H42, JEL H51, JEL I11, JEL I13, public subsidies, uncompensated care
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2018-08-02
2024-04-19
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What Does (Formal) Health Insurance Do, and for Whom?
Annual Review of Economics 10, 261 (2018); https://doi.org/10.1146/annurev-economics-080217-053608
/content/journals/10.1146/annurev-economics-080217-053608
/content/journals/10.1146/annurev-economics-080217-053608
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