Price and Income Elasticity of the Demand for Health Insurance and Health Care Services: A Critical Review of the Literature

Resolving the national debate on health care affordability is likely to involve determining how consumer demand for health insurance and health care responds to changes in price or income. Estimates of these responses—measured as price and income elasticities—are often the basis for proposals to expand access or curb spending. Existing estimates are more than 30 years old and do not factor in recent demand for prescription drugs or mental health services, or current health care plan designs. This literature review examines the existing estimates, identifying gaps in them as well as in the methods used for estimating demand.