Who Uses Individual Health Insurance

1
Who Uses Individual Health Insurance For How
Long?

• Erika Ziller
• Andrew Coburn
• Timothy McBride
• Courtney Andrews

2
Acknowledgment

• The authors would like to thank the Changes in
  Health Care Financing Organization (HCFO)
  initiative of the Robert Wood Johnson Foundation
  for its generous funding support.

3
Previous Studies

• Most prior estimates of individual insurance
  coverage rely on CPS, yielding static estimates
• Research into coverage has primarily been
  descriptive
• Definition of individual insurance has generally
  been residualprivate, not employer

4
Research Questions

• Who uses individual insurance and what are their
  patterns of coverage?
• What characteristics predict how long a person
  has coverage? and,
• What insurance status do people have before and
  after individual insurance spells?

5
Data

• 1996-2000 Survey of Income Program
  Participation (SIPP)
• 12 waves of quarterly retrospective interviews
• 55,500 non-elderly adults (18-64) interviewed
  in month 1
• Individual insurance defined as private coverage
  that was privately purchased
• All presented results are statistically
  significant where p ? .05

6
Spells of Individual Coverage

• 5.9 had individual coverage in month 1
• 13.0 had at least one spell of individual
  insurance between 1996 2000
• More than 1/2 of those with a spell had only one
  spell (58)

Among those with 1 spells
7
Who is Individually Insured?

• 59 have attended college or graduated
• 61 are married
• but rate for widows/ers is nearly 2xs higher
  (10.5)
• 84 are white, non-Hispanic
• rates are highest for Asian-Americans (8.4)

8
Who is Individually Insured? (contd)

• 74 are working, half of them self-employed
• 72 work for firms with less than 25 employees
• 1/3 have family income at or below 200 of
  poverty level
• Almost 90 report themselves to be in good or
  better health
• About 1/2 are aged 45-64

9
Spell Beginnings Endings Employer-Sponsored

• About 2/3 of all spells begin and/or end with
  employer coverage
• 84 of spells that begin with employer also end
  with employer coverage

10
Spell Beginnings Endings Public

• 14 of the individually insured enter from a
  public spell
• Three-quarters of individual spells that begin
  with public coverage also end with public

11
Spell Beginnings Endings Uninsured

• 18 of individual spells begin from an uninsured
  spell
• 1/2 of those uninsured before their individual
  spell gain employer coverage
• 42 of those who enter an individual spell after
  being uninsured, return to being uninsured

12
Spell Lengths

• Median length of individual insurance spells is 8
  months
• 48 retain individual coverage less than 6 months
• 17 have individual coverage for 24 months or
  more

13
Duration Analysis

• Multivariate survival analysis of 6,134 spells
  with observed beginnings
• Variables
• Employment characteristics
• Socio-demographic characteristics
• Health status
• Prior insurance status
• State insurance regulation

14
Characteristics Associated with Spell Length
Longer Spells

• Out of labor force (1.09)
• Entered from employer-based coverage (1.20)
• Self-employed (1.21)
• Firm lt25 workers (1.15)
• Rate-banding in individual market (1.12)

• White, non-Hispanic (1.31)
• Female (1.09)
• Asian (1.21)
• Single, divorced or separated (1.07)

Expected survival time ratios in parentheses
15
Characteristics Associated with Spell Length
(contd)

• Shorter Spells
• Fair/poor health (.91)
• Entered from public coverage (.81)
• Community rating of small group (.93)

• Other
• Age has curvilinear relationship to spell length
  (inverse-U)
• Income is not significantly associated with spell
  length

Expected survival time ratios in parentheses
16
Conclusions

• Findings indicate that the individual insurance
  market is heterogeneous
• Most individual insurance spells bridge periods
  of employer coverage
• 17 of spells last more than 24 months
  Small-business employees self-employed have the
  longest spells
• 1/6 of those exiting individual plans become
  uninsured future analyses should seek to
  improve coverage stability for this group

17
Conclusions

• Median spell length is 8 months and 48 of all
  individual insurance spells last less than six
  months, supporting insurance industry claims that
  marketing administrative costs are higher than
  for group coverage
• Those in poorest health have the shortest
  coverage. Future research needed to understand
  whether these are voluntary or involuntary exits.

18
Conclusions

• HIPAA state portability regulations do not
  apply to some segments of the individual market.
• Nearly 1/5 gain individual insurance after being
  uninsured therefore are not protected by
  portability regulations
• Some of those entering individual insurance from
  group coverage likely do not meet continuous
  coverage requirements
• Family income is not related to being
  individually insured or the length of spell
  future research should examine access to care for
  lower income individual insurance holders.