NCPA - National Center for Policy Analysis

Utilization Of Health Care Services By The Uninsured Self-employed

April 16, 2002

In fact, the gap in the utilization of health care services between the self-employed and wage-earners is generally fairly small. Indeed, for some important services there is no substantial gap at all. Further, there is no evidence that the medical expenditures reduce the capacity of the self-employed to purchase other commodities.

  • On average, the self-employed devote only 0.4 percent more of their incomes to out-of-pocket medical expenditures than wage-earners.
  • Researchers found no statistically significant differences in utilization rates between wage-earners and the self-employed in hospital admissions, hospital stays, dental checkups and optometrist visits.
  • There are areas where the utilization rates are somewhat lower for the self employed -- for example, other things being equal, the probability of visiting a doctor is 5.9 percentage points (or 9 percent) less for the self-employed than for those employed by others.
  • However, the self-employed actually have higher utilization rates for alternative care and chiropractor visits.

The principal means for improving the access of the self-employed to health care has been to subsidize their purchases of health insurance through the personal income tax. Currently, self-employed workers are allowed to deduct 60 percent of their health-insurance premiums. This is up from 45 percent in 1998. The deduction will rise to 70 percent of premium costs in 2002 and 100 percent in 2003 and thereafter.

Source: David R. Francis, "Lessons from the Uninsured Self-Employed," NBER Digest, December 2001; based on Craig William Perry and Harvey Rosen, "Insurance and the Utilization of Medical Services Among the Self-Employed," NBER Working Paper No. 8490, September 2001, National Bureau of Economic Research.

For NBER Digest text:


Browse more articles on Health Issues