Analysis of Risk Protection from Health Insurance Using PSID Data from the United States, 1999–2019

<p><span>This paper investigates the risk protection from health insurance, accounting for the interaction between health care cost risk and other risks such as income risk. Using panel data on household-level consumption, income, and out-of-pocket health spending, the study found that standard health insurance contracts amplify other risks, while alternative contracts that limit out-of-pocket spending relative to income can provide better risk protection. The analysis uses household-level data from the Panel Study of Income Dynamics (PSID), waves 1999–2019. The PSID data were used to measure consumption, income, out-of-pocket health spending, health insurance status, and demographic characteristics over time. The long panel structure enabled analysis of within-household variation across different time horizons. The full replication package, including code and additional data files, is available at the Harvard Dataverse: </span><a href="https://doi.org/10.7910/DVN/GNDABS"><u><span>https://doi.org/10.7910/DVN/GNDABS</span></u></a><span>.</span></p>