Changes in Coverage in the Individual and Group Health Insurance Markets and the Effect of Health Status

Although the vast majority of privately insured people in the U.S. obtain their coverage in the employment-based group market, about 17 million people under age 65 were insured in the individual health insurance market in 2006. About 47 million people, or 16% of the total U.S. population, were without health insurance coverage in 2006. Researchers know relatively little about how the group and individual markets actually function for those with chronic health conditions, and much of what we know is based on point-in-time analyses of insurance coverage. However, insurance coverage is actually very dynamic due to changes in employment and because eligibility for public programs typically depends on income and other criteria. This paper provides an in-depth look at the impact of health status on changes in coverage in these insurance markets using data from the Medical Expenditure Panel Survey. We also use these data to examine the effect of health status on changes in premiums in the individual insurance market. [38 PDF pages]