Negative Discount Rates for Health Insurance
Author
Hodgson, Ashley Renee
Subject
Washington and Lee University -- Honors in Economics
Health insurance
Medical care, Cost of
Metadata
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This paper measures the discount rate of health insurance by surveying. a sample of nearly 1,000 Washington and Lee alumni. We calculated the discount rate from a series of open-ended survey questions, eliminating some of the bias introduced in past studies that presented respondents with a series of pre-calculated options. Results showed that a large majority (81 % ) of individuals had negative discount rates for health insurance, meaning they prefer insurance in the future as opposed to the present. The study also indicates that people with negative discount rates behave differently with respect to time horizon than people with positive discount rates. These results suggest that a demand-side policy approach to increasing the number of people insured will be relatively ineffective.