Household demand for health insurance: price and spouse’s coverage. Final report to U.S. Department of Labor, Employee Benefits Security Administration. Revised 2005: Hunter College Department of Economics Working Papers

Demand for employment-based health insurance has traditionally been treated as an individual rather than a household decision. Dual-earner households are now the typical U.S. married household, however, and most firms offer family coverage as one of the options available to employees. Findings from a model that jointly estimates married workers ’ take-up of their own employer-based insurance with both their own and their spouses ’ insurance offers indicate that both own insurance price and opportunities for coverage under spouses ’ employer-based plans are statistically important determinants of insurance take-up in dual-earner households. Relative take-up elasticities with respect to own price and spouse’s offer indicate that potential coverage by spouses plays the larger role for both husbands and wives in the decision of whether to take their own coverage. We find evidence of selection into jobs offering health insurance among wives in dual-earner households, but not among husbands. Our findings also suggest that dual-earners may not be aware of the potential trade-off between wages and healt