Filling Gaps in Health Insurance
Dr. Pamela Farley Short, professor of Health Policy and Administration, tells the story of a woman who was between jobs and without health insurance. She took advantage of the time off from work to go for a mammogram. When the mammogram showed that she had breast cancer, she was panicked-and not just by the threat to her life. She quickly called her old employer and asked about signing up for continued health insurance benefits via COBRA, the federal law that allows former employees to keep their insurance for a year and half by paying the entire premium. To her horror, she was told that she was too late. The deadline had passed.
She soon found another job with health insurance benefits, but she learned that her new policy would not cover the bills for her cancer treatment. The new insurer said that her cancer was a "pre-existing condition" and, because she allowed her insurance to lapse, the insurer did not have to pay for pre-existing conditions.
"This story goes to show that being uninsured for even a little while is a threat to a person's health and finances," explains Short. "Our research shows that about two million people lose their health insurance every month. Although a lot of them get a new plan within a relatively short time, in 6 months or so, that adds up to a lot of people who face the problem of being uninsured at some point in their lives."
Short and her collaborators examined changes in the health insurance of a large national sample of people during the four years from 1996 to 1999. They analyzed data from a survey conducted by the U.S. Census Bureau. Their analyses showed that 85 million Americans, more than a third of the population under age 65, spent some without health insurance during the four years. That figure is about twice the commonly cited estimate, around 40 million, that is the number of people who lack insurance in any given month. By tracking people over time, the researchers also learned that many people cycled in and out of coverage several times over the course of the survey.
"We often use the term 'churning' to describe the movement in and out of health insurance," Short explains. Short, Dr. Deborah Graefe, research associate of the Population Research Institute and Cathy Schoen, vice president of The Commonwealth Fund, found that churning was quite common. According to national estimates based on the 1996 Survey of Income and Program Participation, 28 million Americans were uninsured more than once from 1996 to 1999. A majority of those uninsured during the four years-45 million people-lacked health insurance for at least 12 of the 48 months when multiple uninsured gaps were considered. Nearly 30 million people were uninsured for more than 24 months in all.
"Churning has both health and financial implications," Short continues. "Churning can disrupt the continuity of health care, since continuity of health care hinges on continuity in coverage. This can be especially difficult for people with chronic illnesses who need continuous care or people like the woman in my story who are diagnosed with a life-threatening illness. It also can greatly affect children, who may not receive important preventive services while they are uninsured. Being in and out of coverage may be just about as bad as having no coverage at all."
"On the financial side, churning wastes money," Short continues. "It takes administrative time and expense to enroll people in health insurance plans. Enrollees in public programs like Medicaid and SCHIP have to re-apply every year, and they frequently are dropped from the computerized enrollment files when they fail to send back the necessary paperwork. Then they go to their doctors when they need care and are told that they are no longer enrolled. At that point, they have to be reinstated, which is a big waste of time and money."
The researchers found that people with lower incomes and racial and ethnic minorities were hardest hit with multiple gaps in health insurance. African Americans and Hispanics experienced more problems with unstable insurance than whites. Hispanics were the hardest hit, with three-quarters of lower-income Hispanics uninsured at some point in four years. Viewed separately by income, 68% of those with incomes below 200% of the poverty line spent some time uninsured, including 42% who were uninsured for more than 12 months in total. Gaps at low income levels are caused by frequent breaks and changes in employment, as well the loss of public insurance.
Policymakers tend to focus on the number of people who are uninsured at any one time, and to equate gaps in coverage with population groups like children or low income families that are most likely to be uninsured. Rather than profile high-risk groups, Short's research focuses on uninsured gaps over time. She emphasizes that the challenge for policy is to design new programs that will fill these gaps, and to avoid programs with restrictive eligibility criteria that create new gaps when family circumstances change.
"In our research we are looking at gaps over time and thinking of ways to fill them," Short says. "In particular, we're looking at ways to help people keep the coverage that they now lose. For example, new tax credits that the President and others are proposing could be used by individuals to extend their private insurance through COBRA or to pay for additional time on Medicaid and SCHIP."