Table 4.
Premium Elasticity Estimates
| Employee-Only Coverage | Family Coverage | |||
|---|---|---|---|---|
| Employee Perspective | Health Plan Perspective | Employee Perspective | Health Plan Perspective | |
| Definity Health | ||||
| No chronic condition | −0.387 | −4.584 | −0.786 | −5.375 |
| Chronic condition | −0.58 | −6.876 | −1.572 | −10.749 |
| HealthPartners HMO | ||||
| No chronic condition | N/A | −2.064 | −0.155 | −2.58 |
| Chronic condition | N/A | −3.097 | −0.309 | −5.161 |
Notes:
Formula for premium elasticity: n=B(1 − P)X
B = coefficient, P = probability of choosing this plan, X = tax-adjusted out-of pocket (total) premium for employee (health plan) perspective elasticity
Marginal tax rates for employees: HealthPartners = 0.36, Definity Health = 0.39