Why Did Americans Reject Compulsory Health Insurance after WWI? An Application of the Lifecycle Model

Table 2

Comparison of results, high earnings profile (𝜎=2, 𝛽=0.997).

	Expected lifetime utility for
Initial wealth ($)	No insurance over lifetime	IOOF insurance for first year only	IOOF insurance for first 3 years only	IOOF insurance for first 5 years only	IOOF insurance; for first 7 years only	IOOF; insurance; for 40 years	AALL insurance; (4.0% premium)	AALL insurance; (2.6% premium)	AALL insurance; (2.1% premium)
0	−∞	6.7455	6.7457	6.7457	6.7457	6.7456	6.7314	6.7424	6.7463
2	4.6258	6.7457	6.7458	6.7458	6.7459	6.7457	6.7315	6.7425	6.7463
4	6.7100	6.7458	6.7459	6.7459	6.7460	6.7458	6.7315	6.7426	6.7464
6	6.7388	6.7459	6.7461	6.7461	6.7461	6.7460	6.7316	6.7426	6.7465
8	6.7423	6.7461	6.7462	6.7462	6.7463	6.7461	6.7317	6.7427	6.7466
10	6.7435	6.7462	6.7463	6.7463	6.7464	6.7462	6.7318	6.7428	6.7466
22	6.7459	6.7468	6.7469	6.7469	6.7470	6.7468	6.7322	6.7432	6.7470
130	6.7510	6.7510	6.7510	6.7510	6.7511	6.7509	6.7357	6.7467	6.7505
132	6.7511	6.7511	6.7511	6.7511	6.7511	6.7510	6.7358	6.7467	6.7505
240	6.7547	6.7546	6.7545	6.7545	6.7545	6.7543	6.7390	6.7499	6.7536

Note: values in boldface show the highest expected lifetime utility for a given value of initial wealth across the given insurance options.