The Health Insurance and Life Satisfaction Connection

Abstract

Prior studies indicate that perceived health is strongly associated with a sense of well-being. The effect of health insurance is much less clear: there has been little rigorous empirical research assessing whether health coverage has an independent impact on individual happiness. This topic is especially important in the US where recently an estimated 18 % of the non-elderly were uninsured and extension of coverage through means such as the Affordable Care Act has been controversial. The present study addresses this question. Drawing from a large survey that collected comprehensive health and personal information about the US adult population, controlling for a wide variety of factors known to influence well-being, and addressing the possible endogeneity of having health insurance, we find that individuals without health insurance coverage were less likely to be “very satisfied” or “satisfied” with life. This may be because health insurance reduces uncertainty. Regardless of other benefits it may bring, the expansion of health insurance coverage should increase the life satisfaction of American society.