MarketWatch: How risky is individual health insurance?

Health Affairs

Volumn 27, Issue 3, 2008, Pages

  Pauly, Mark V ^a   Lieberthal, Robert D ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; HEALTH CARE COST; HEALTH INSURANCE; HEALTH STATUS; INCOME; MARKET; PRIVATE HEALTH INSURANCE; AGE; CLASSIFICATION; COMPARATIVE STUDY; FEMALE; HUMAN; INSURANCE; MALE; MULTIVARIATE ANALYSIS; PATIENT; SEX DIFFERENCE; STATISTICS; UNITED STATES;

AGE FACTORS; FEMALE; HEALTH STATUS; HUMANS; INSURANCE COVERAGE; INSURANCE, HEALTH; MALE; MEDICALLY UNINSURED; MULTIVARIATE ANALYSIS; SEX FACTORS; UNITED STATES;

EID: 44449139133     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.27.3.w242     Document Type: Article

References (16)

1. M.A. Hall, "Of Magic Wands and Kaleidoscopes: Fixing Problems in the Individual Market," Health Affairs 21 (2002): w353-w358 (published online 23 October 2002; 10.1377/hlthaff.w2.353).
2. For information on guaranteed renewability in individual insurance and the prevalence of this feature, see M. Pauly, A. Percy, and B. Herring, "Individual versus Job-Based Health Insurance: Weighing the Pros and Cons," Health Affairs 18, no. 6 (1999): 28-44;
3. B. Herring and M.V. Pauly, "Incentive-Compatible Guaranteed Renewable Health Insurance Premiums," Journal of Health Economics 25, no. 3 (2006): 395-417;
4. M.V. Pauly and B. Herring, "Risk Pooling and Regulation: Policy and Reality in Today's Individual Health Insurance Market," Health Affairs 26, no. 3 (2007): 770-779;
5. V. Patel and M.V. Pauly, "Guaranteed Renewability and the Problem of Risk Variation in Individual Health Insurance Markets," Health Affairs 21 (2002): w280-w289 (published online 28 August 2002; 10.1377/hlthaff.w2.280);
6. and R. Feldman and J. Schultz, "Consumer Demand for Guaranteed Renewability in Health Insurance," Journal of Consumer Policy 27, no. 1 (2004): 75-97.
7. E.C. Ziller et al., "Patterns of Individual Health Insurance Coverage, 1996-2000," Health Affairs 23, no. 6 (2004): 210-221.
8. M.V. Pauly and L.M. Nichols, "Ten Myths of the Uninsured," AHIP Coverage 45, no. 3 (2004): 16-22.
9. M.K. Bundorf and M.V. Pauly, "Is Health Insurance Affordable for the Uninsured?" Journal of Health Economics 25, no. 4 (2006): 650-673.
10. B.C. Madrian, "Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?" Quarterly Journal of Economics 109, no. 1 (1994): 27-54.
11. U.S. Census Bureau, Survey of Income and Program Participation User's Guide, 3d ed., 2001, http://www.sipp.census.gov/sipp/usrguide/sipp2001.pdf (accessed 28 March 2008).
12. This flexible form allows all coefficients to differ across initial insurance setting, our main focus.
13. Regression results are available in a statistical appendix, online at http://content.healthaffairs.org/cgi/content/full/hlthaff.27.3.w242/DC2.
14. We also explored (results not shown) another specification in which health state was a binary, with those with "fair" or "poor" health in one category, and those with "good," "very good," and "excellent" in the other. The measures of goodness of fit were less good for this specification, but the overall pattern was the same as that shown with the continuous measure: people initially with small-group coverage who were in fair or poor health were more likely than those in good to excellent health to drop or lose coverage, whereas there was no effect of health status for those with individual coverage.
15. Although we selected these relative income levels primarily to illustrate the effect of changing income on discontinuation of insurance coverage, we note that the lower income levels are close to the U.S. median income and to the average income of individual insurance purchases, as documented by Henry J. Kaiser Family Foundation, "How Non-Group Coverage Varies with Income," 4 February 2008, http://www.kff.org/insurance/upload/7737.pdf (accessed 28 March 2008).
16. Logit regressions adding change in employment status as an explanatory variable, in results not shown, found that the change in status is a statistically significant predictor of dropping coverage for workers initially in small and large groups, but for the individual sample, change in status has a small but statistically significant effect decreasing the likelihood of dropping or losing coverage.