Increasing health insurance costs and the decline in insurance coverage.
OBJECTIVE
To determine the impact of rising health insurance premiums on coverage rates.


METHODS
Our analysis is based on two cohorts of nonelderly Americans residing in 64 large metropolitan statistical areas (MSAs) surveyed in the Current Population Survey in 1989-1991 and 1998-2000. Measures of premiums are based on data from the Health Insurance Association of America and the Kaiser Family Foundation/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits.


METHODS
Probit regression and instrumental variable techniques are used to estimate the association between rising local health insurance costs and the falling propensity for individuals to have any health insurance coverage, controlling for a rich array of economic, demographic, and policy covariates.


RESULTS
More than half of the decline in coverage rates experienced over the 1990s is attributable to the increase in health insurance premiums (2.0 percentage points of the 3.1 percentage point decline). Medicaid expansions led to a 1 percentage point increase in coverage. Changes in economic and demographic factors had little net effect. The number of people uninsured could increase by 1.9-6.3 million in the decade ending 2010 if real, per capita medical costs increase at a rate of 1-3 percentage points, holding all else constant.


CONCLUSIONS
Initiatives aimed at reducing the number of uninsured must confront the growing pressure on coverage rates generated by rising costs.
Chernew
Michael
M
Department of Public Health, University of Michigan, Ann Arbor, MI 48109, USA.
Cutler
David M
DM
Keenan
Patricia Seliger
PS
D000328:Adult; D015331:Cohort Studies; D003365:Costs and Cost Analysis; D005249:Fees and Charges; D005260:Female; D017048:Health Care Costs; D006801:Humans; D019458:Insurance Coverage / Q000191:economics* / Q000706:statistics & numerical data; D007348:Insurance, Health / Q000191:economics*; D008297:Male; D017057:Medically Uninsured / Q000706:statistics & numerical data; D008875:Middle Aged; D015999:Multivariate Analysis; D012044:Regression Analysis; D014481:United States