Adverse selection and price sensitivity when low-income people have subsidies to purchase health insurance in the private market

Policymakers interested in subsidizing low-income people's purchase of private insurance face two major questions: will such subsidies lead to adverse selection, and how large do the subsidies have to be to induce large numbers of eligible people to purchase the insurance? This study examines New Jersey's short-lived experience with a premium subsidy program, Health Access New Jersey (Access Program). The program was for people in families with incomes below 250% of the poverty level who were not eligible for health insurance provided by an employer, or Medicaid or Medicare, and who wished to purchase policies in the state's individual health insurance market, the Individual Health Coverage Program. Surveying a random sample of Access Program policyholders, we compared their demographic and socioeconomic characteristics, as well as their health status, to those of other New Jersey residents who had family incomes below 250% of the poverty level to determine whether there was any evidence of adverse selection among the people who enrolled in the Access Program. The people who enrolled were not in worse health than uninsured people with incomes below 250% of the poverty level, but they were quite price sensitive. Most enrollees had incomes within the low end of the income eligibility distribution, reflecting the structure of rapidly declining subsidies as income increased.

Meeting information needs: lessons learned from New Jersey's Individual Health Insurance Reform Program

At national and state levels, there have been significant changes in the regulations governing individual and small group health insurance markets. Reforms to the individual health insurance market in New Jersey exemplify the challenges of informing consumers about changes in the regulation of insurers, where the changes are intended to simplify and broaden access to health insurance. To best take advantage of expanded access to coverage under new regulations governing the individual health insurance market, individuals need to understand the changed rules under which carriers determine eligibility and premiums. Survey results from New Jersey indicate, however, that a significant proportion of people who purchased policies under the restructured individual health insurance market did not fully understand how the new market operates.

Can adverse selection be avoided in a market for individual health insurance?

Adverse selection is a potentially significant problem in the individual (nongroup) health insurance markets if states use regulations to restrict insurance companies' ability to select whom they will insure. In 1993, New Jersey implemented the Individual Health Coverage Program (IHCP), presenting an opportunity to test for adverse selection when insurers' ability to select enrollees is severely restricted. The authors collected socioeconomic, demographic, and health status data from a sample of 2,211 adults covered by IHCP policies and compared the IHCP enrollee characteristics with those of two control groups of New Jersey residents (uninsured adults and adults with employer group insurance). Adverse selection does not appear to have occurred against the IHCP. However, the IHCP premiums were not cheap, and the findings suggest that people who can afford to purchase individual insurance and do so are, on average, healthier than those who do not choose to enroll, probably because the latter cannot afford insurance.

The effect of change of health insurance on access to care

This study examines how changes in health insurance status affect patients and their care. Results show that, controlling for socioeconomic factors, condition, age, and urgency, patients who lost insurance and patients who changed insurance were more likely to delay seeking care within the four months after visiting an emergency department than people whose health insurance status did not change. Patients who lost coverage were more likely to report no primary care provider and were less likely to have recommended follow-up care within the four-month period. Loss of insurance also was associated with lower likelihood of vaccine use and check-ups in the prior year. The study confirms that a loss or change in health insurance in the prior year has a measurable effect on access to health care. The greatest impact was among patients who lost insurance, though patients who changed health plans also were more likely to delay seeking care than patients whose health insurance status did not change.

Wavelet analysis of neuroelectric waveforms: a conceptual tutorial

This paper presents a nontechnical, conceptually oriented introduction to wavelet analysis and its application to neuroelectric waveforms such as the EEG and event related potentials (ERP). Wavelet analysis refers to a growing class of signal processing techniques and transforms that use wavelets and wavelet packets to decompose and manipulate time-varying, nonstationary signals. Neuroelectric waveforms fall into this category of signals because they typically have frequency content that varies as a function of time and recording site. Wavelet techniques can optimize the analysis of such signals by providing excellent joint time-frequency resolution. The ability of wavelet analysis to accurately resolve neuroelectric waveforms into specific time and frequency components leads to several analysis applications. Some of these applications are time-varying filtering for denoising single trial ERPs, EEG spike and spindle detection, ERP component separation and measurement, hearing-threshold estimation via auditory brainstem evoked response measurements, isolation of specific EEG and ERP rhythms, scale-specific topographic analysis, and dense-sensor array data compression. The present tutorial describes the basic concepts of wavelet analysis that underlie these and other applications. In addition, the application of a recently developed method of custom designing Meyer wavelets to match the waveshapes of particular neuroelectric waveforms is illustrated. Matched wavelets are physiologically sensible pattern analyzers for EEG and ERP waveforms and their superior performance is illustrated with real data examples.

Insurance or a regular physician: which is the most powerful predictor of health care?

OBJECTIVES

This study compared the relative effects on access to health care of relationship with a regular physician and insurance status.

METHODS

The subjects were 1952 nonretired, non-Medicare patients aged 18 to 64 years who presented with 1 of 6 chief complaints to 5 academic hospital emergency departments in Boston and Cambridge, Mass, during a 1-month study period in 1995. Access to care was evaluated by 3 measures: delay in seeking care for the current complaint, no physician visit in the previous year, and no emergency department visit in the previous year.

RESULTS

After clinical and socioeconomic characteristics were controlled, lacking a regular physician was a stronger, more consistent predictor than insurance status of delay in seeking care (odds ratio [OR] = 1.6, 95% confidence interval [CI] = 1.2, 2.1), no physician visit [OR] = 4.5%, 95% CI = 3.3, 6.1), and no emergency department visit (OR = 1.8, 95% CI = 1.4, 2.4). For patients with a regular physician, access was no different between the uninsured and the privately insured. For privately insured patients, those with no regular physician had worse access than those with a regular physician.

CONCLUSIONS

Among patients presenting to emergency departments, relationship with a regular physician is a stronger predictor than insurance status of access to care.

Insurance agents: ignored players in health insurance reform

In this paper we use the reforms to the individual health insurance market in New Jersey to illustrate the intricate interaction between insurance agents and insurance reform initiatives. Until recently, policymakers who designed reforms to the health insurance market largely ignored the role of agents in selling individual health insurance policies. These reforms have the potential to overturn the agent's traditional role, and agents can influence how the reforms are implemented.

Changes in the 1995 Current Population Survey and estimates of health insurance coverage

This analysis compares the March 1994 and March 1995 Current Population Survey (CPS) counts of the numbers of people with different types of health insurance and without any health insurance coverage. The findings contain some surprises: there were no changes in the numbers of nonelderly people with Medicaid coverage and without any health insurance, and there were increases in the numbers of nonelderly people with employer-sponsored health insurance and with CHAMPUS/VA/military health care. Four changes were introduced in the CPS in 1995 and were likely, by themselves, to both raise and lower the estimates of the numbers of people with specific types of health insurance coverage. Three of the changes relate to questions about health insurance coverage; they coincide with the traditional mid-decade shift in the sample framework for the CPS.