Patterns Of Individual Health Insurance Coverage, 1996–2000

Abstract

Information about patterns of individual health insurance coverage is limited.Knowledge gaps include the extent to which individual insurance provides transitional versus long-term coverage, and participants' insurance status before and after being covered by an individual plan. In this study we use data from the 1996-2000 Survey of Income and Program Participation (SIPP) to examine how long the individually insured maintain their coverage; sources of coverage before and after enrolling in an individual health plan; and characteristics of those who rely on individual insurance coverage. Understanding the dynamics of this market will better inform federal and state insurance reform efforts. I n t h e fac e o f t h e g r ow i n g p r o b le m of uninsurance, U.S. policymakers have proposed using the individual insurance market to increase coverage. 1 However, policy discussions are hampered by limitations in empirical knowledge about the individual market and its participants.2 A limitation of prior research has been that the most readily available data sources, such as the Current Population Survey (CPS), are cross-sectional. This means that previous studies have been unable to explore patterns of individual insurance coverage over time.Little is known about the extent to which individual insurance provides transitional or longer-term coverage. We also do not know what types of insurance coverage people hold before purchasing or after leaving an individual plan. Experts observe that before making policy prescriptions, we need a clearer understanding of how people move between individual and other sources of coverage.3 Additionally, analysts believe that volatile enrollment and disenrollment patterns have undermined the effects of state and federal individual insurance reforms. 4 These patterns have been inferred from researchers' observations that many people hold both employer and individual insurance over the course of a year. D a t a W a t c h

Changes in Financial Burdens for Health Care

“…Recent studies have found that the nongroup market is small, volatile, and subject to potential market failures. 18,19 Persons with nongroup plans are nearly 3 times as likely to bear high total burdens as individuals in any other insurance category, including the uninsured. …”

Consumer Decision Making In The Individual Health Insurance Market

“…However, the conventional view is that the individual market primarily serves to bridge short-term gaps in group coverage instead of providing long-term, continuous coverage. 16 Our study of the California market, in contrast, suggests that the market is an important source of long-term coverage for a sizable fraction of those who purchase it. About 60 percent of new coverage episodes continue more than one year, and more than 30 percent continue for more than three years (Exhibit 1).…”

How Risky Is Individual Health Insurance?

“…3 They looked only at people who began with individual insurance and at those who terminated spells of this type of insurance for a wide variety of alternatives (group insurance, public insurance, and becoming uninsured), not at those who persisted. In contrast, we compared people who started with group insurance as well as individual insurance.…”