How Risky is Individual Health Insurance?

This paper describes the relationship between the type of insurance coverage a person has in one period and the likelihood of becoming uninsured in the next. Using SIPP data, the authors find that, for people at the median health status, becoming uninsured is most likely for those with individual insurance, less likely for those with small group insurance, and least likely for those with large group insurance. However, they ind that for people in poor or fair health, the chances of losing coverage are much greater for people who had small group insurance than for those who had individual insurance. The authors attribute these results to the offsetting effects of high loadings and guaranteed renewability on the individual market. [16 PDF pages]