Insurance Arrangements Among Married Couples: Analysis of Benefit Substitution and Compensating Differentials

Data from the Medical Expenditure Panel Survey indicate that for couples in which both spouses are employed, 36% of privately insured couples are characterized by an arrangement in which the husband and wife are enrolled in separate plans. This paper empirically investigates several aspects of spouses’ decisions to enroll in separate insurance plans. Results indicate that each spouse’s probability of being offered employer-provided insurance is related to the probability that his or her partner is also offered employer-provided insurance. Furthermore, married couples appear to pay for various insurance arrangements through lower wage earnings.