Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/264536 
Year of Publication: 
2022
Citation: 
[Journal:] Health Economics [ISSN:] 1099-1050 [Volume:] 31 [Issue:] 6 [Publisher:] Wiley Periodicals, Inc. [Place:] Hoboken, USA [Year:] 2022 [Pages:] 1249-1257
Publisher: 
Wiley Periodicals, Inc., Hoboken, USA
Abstract: 
Even when heavily subsidized, a substantial portion of people choose to forgo purchasing health insurance coverage. In this note, I introduce an explanation for this phenomenon which does not assume choice errors, incorrect beliefs, differently priced uncompensated care, or information asymmetries. When individuals are incapable of freely trading off health and wealth and the initial allocation of goods is suboptimal from their perspective, the standard result of demand for actuarially fair insurance in a single good world does not generalize to the health insurance context. Thus, people might not purchase full health insurance coverage even if it is priced at actuarially fair levels. I argue that this situation is particularly likely to occur in the low‐income population, and hence it is relevant for the achievement of universal health coverage.
Subjects: 
health insurance
underinsurance
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article
Document Version: 
Published Version

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