Research: How Older Workers Value Employee Health Insurance

An issue brief published by the Center for Retirement Research at Boston College analyzes data from the Health and Retirement Study (HRS) to compare the value that workers place on health insurance with their perceptions about the cost of coverage. In particular, in "How Much Do Older Workers Value Employee Health Insurance?", that authors--Leora Friedberg, Wei Sun, and Anthony Webb--sought to compare cost with willingness-to-pay by those without insurance and those without.

The authors' analysis revealed "substantial differences between the valuations that the currently insured place on health insurance and the amount that the currently uninsured would be willing to pay in order to obtain coverage." However, while the "average willingness to pay among the uninsured is less than the likely cost of providing coverage, moderate targeted subsidies might generate substantial take-up under a voluntary program, while reducing the number of households made worse off under a mandatory program."

Source: Center for Retirement Research at Boston College Brief IB#8-9 (July 11, 2008)