Who Uses Individual Health
Insurance & For How Long?
Erika Ziller
Andrew Coburn
Timothy McBride
Courtney Andrews
Muskie School of Public Service
University of Southern Maine
Muskie School of Public Service
University of Southern Maine
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.
Muskie School of Public Service
University of Southern Maine
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
residual—”private, not employer”
Muskie School of Public Service
University of Southern Maine
Research Questions
1.
Who uses individual insurance and what are their
patterns of coverage?
2.
What characteristics predict how long a person has
coverage? and,
3.
What insurance status do people have before and
after individual insurance spells?
Muskie School of Public Service
University of Southern Maine
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
Muskie School of Public Service
University of Southern Maine
Spells of Individual Coverage



Number of Spells
over 48 months*
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%)
10%
32%
58%
1 Spell
2 Spells
3+ Spells
*Among those with 1+ spells
Muskie School of Public Service
University of Southern Maine
Who is Individually Insured?

59% have attended college or graduated

61% are married
–

but rate for widows/ers is nearly 2x’s higher
(10.5%)
84% are white, non-Hispanic
–
rates are highest for Asian-Americans (8.4%)
Muskie School of Public Service
University of Southern Maine
Who is Individually Insured? (cont’d)

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
Muskie School of Public Service
University of Southern Maine
Spell Beginnings & Endings:
Employer-Sponsored
Spell Endings


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
11%
5%
84%
Uninsured
Public
Employer
Muskie School of Public Service
University of Southern Maine
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
Spell Endings
18%
75%
7%
Uninsured
Public
Employer
Muskie School of Public Service
University of Southern Maine
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
Spell Endings
9%
42%
Uninsured
49%
Public
Employer
Muskie School of Public Service
University of Southern Maine
Spell Lengths



Median length of
individual insurance
spells is 8 months
48% retain individual
coverage less than 6
months
Spell Lengths (in months)
17%
5%
48%
14%
17% have individual
coverage for 24 months
or more
16%
<6
6 to 11
12 to 17
18 to 23
24+
Muskie School of Public Service
University of Southern Maine
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
Muskie School of Public Service
University of Southern Maine
Characteristics Associated with
Spell Length
Longer Spells*





Out of labor force (1.09)
Entered from employerbased coverage (1.20)
Self-employed (1.21)
Firm <25 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
Muskie School of Public Service
University of Southern Maine
Characteristics Associated with
Spell Length (cont’d)



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
Muskie School of Public Service
University of Southern Maine
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; Smallbusiness 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
Muskie School of Public Service
University of Southern Maine
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.
Muskie School of Public Service
University of Southern Maine
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.