Affordable Missouri Health Insurance Price Sensitivity Issues

Massachusetts' Experiences in Determining Affordability

Price Sensitivity and Take-up Rates

Most people will buy health insurance if they consider it affordable. A number of analysts and policymakers have used estimations of take-up rates (the price level at which a person decides to voluntarily enroll in insurance) or price sensitivity (how consumers respond to price changes for a particular good) for health insurance to set subsidy levels and to estimate program enrollment. These figures also help establish the cost of various reform proposals. Kenneth Thorpe of Emory University developed a formula to project enrollment in Vermont's recent health reform estimates take-up rates.₃

Thorpe's formula creates an affordability scale for those with incomes between the point at which they cannot afford any contribution and the point at which they can afford the full cost of insurance. For those with incomes just above 150 percent FPL ($15,600), Thorpe's analysis projects a "lower bound" of affordability at about 1.8 percent of income. The scale indicates that people above 500 percent FPL ($52,000) can pay a greater percentage of earnings in health costs as their income level increases, up to 8.5 percent of income for people with income.