The consequences of health insurance coverage gaps

by The Incidental Economist on January 6, 2014 · 3 comments

It’s now January 2014, and all the coverage provisions of the Affordable Care Act are in effect. As of a few years ago, the expectation was that, by now, anyone who wanted health insurance could easily obtain it. In practice, for several reasons, that has turned out not to be the case.

Half of U.S. states have not expanded their Medicaid programs, leaving families with below-poverty-line incomes with no affordable coverage options. The flawed rollout of exchange websites has also made obtaining coverage a challenge for some people with above-poverty-line incomes. Some have had their previous policies canceled but have not yet been able to pick up new coverage. Others may have succeeded in selecting a new plan, but have not paid the premium, also rendering them uncovered. (Related, see the posts by Sarah KliffCharles Ornstein, and Jordan Rau.)

Therefore, some who might want coverage haven’t yet obtained it, leaving them with a coverage gap. How big a deal is this? What does the literature say about consequences of gaps in coverage, particularly for non-elderly adults, the principal target population for Obamacare’s coverage expansion?

Daniel Liebman, a part-time research assistant for The Incidental Economist, put together a literature review on this question. What follows are the highlights, mostly focused on work pertaining to short term gaps in coverage for non-elderly adults.

One consequence of a coverage gap that you can probably guess is a degradation in access to care. Examining the 1999 National Survey of America’s Families, Haley and Zuckerman (Kaiser Commission on Medicaid and the Uninsured, 2003) found that when individuals lose health insurance, even for a short time, they are 8% less likely to have a usual source of care, 8% more likely to lack confidence in their ability to obtain care, and 12% more likely to have unmet needs for care or pharmaceuticals.

Using 1998 Behavioral Risk Factor Surveillance System data, Ayanian et al. (JAMA, 2000) compared the unmet health needs of the long-term (over one year) and short-term (less than one year) uninsured. Both were about three times more likely to report not seeing a physician due to cost, relative to the fully insured. Qualitatively similar results on degradation of access to care have been found in many other studies. See, for example, Schoen and DesRoches (Health Services Research, 2000) and Lavaredda (Medical Care, 2008).

With a loss of access comes a predictable decrease in use of preventative services. Sudano and Baker (American Journal of Public Health, 2003) examined the 1992-1996 Health and Retirement Survey and found that individuals in their 50s and 60s with coverage gaps were significantly less likely to receive preventive health services like mammography, Pap tests, cholesterol checks, flu vaccination, and prostate and breast cancer screenings. However, it is not clear from this paper or a consensus from the literature in general what the minimum coverage gap must be to have a significant effect on preventive services. Bednarek and Schone (Journal of Health Care for the Poor and Underserved, 2003), analyzing 1996 Medical Expenditure Panel Survey data, found a large reduction in use of preventive services for individuals uninsured for 12 months, a modest effect for those uninsured from 6-11 months, and no statistically significant effect for those uninsured for fewer months.

Since a principal role of insurance is financial protection, a second fairly predictable consequence of loss of coverage is an increased chance of incurring medical debt. Carlson et al. (Annals of Family Medicine, 2006) studied the likelihood of incurring medical debt, as well as changes in access, in the first ten months after loss of Medicaid coverage in Oregon. Like the studies described above, they found that those with disrupted coverage suffered a loss of access to care: they were less likely to have a primary care visit and  more likely to have unmet health care needs. They were also more likely to incur medical debt compared to continuously insured. Based on a survey of nearly 3,000 non-elderly adults, Duchon et al. (Commonwealth Fund2001) found, among other things, that 56% of families with at least one member lacking insurance in the past year reported medical bill problems, compared to 25% in families with all members insured.

Finally, what are the consequences of coverage gaps for health? Using the 1992-1996 Health and Retirement Survey to study individuals between 51 and 61 years of age, Baker et al. (NEJM, 2001) found that those with coverage gaps for up to two years were more likely than the continuously insured to have a major decline in overall health or a new physical difficulty. Because coverage gaps shorter than two years could not be independently examined, the extent to which these findings generalize to gaps of a few or only one month is not clear.

Though it is undoubtedly true that most people can go one or even several months without coverage and suffer no substantial harm, one would be taking a risk in doing so. Most likely, it is those with chronic conditions and low incomes that suffer the greatest harm without coverage. The studies above clearly suggest that there are eventual harms to access, receipt of preventive care, financial well-being, and health due to gaps in coverage, though not all the harms may be apparent for very short duration coverage gaps. Nevertheless, it is hard to avoid the conclusion that the lack of full expansion of Medicaid and the troubled roll-out of exchange websites could have real consequences for some individuals who experience gaps in coverage.



Jack Towarnicky January 7, 2014 at 7:43 am

Some questions:
– What is the size of the affected population – non-elderly, non-disabled adults with incomes < 100% of FPL in the half of all states that did not expand Medicaid?
Many previously eligible for Medicaid are not enrolled. What was their experience? What will be different since theirr eligibility has not changed?
Any idea on what will be the ultimate impact from elimination of pre-existing condition exclusions and almost all medical underwriting from all health policies?
Why won't people lie and overstate their income as 101% of FPL? Will people be retroactively thrown off of exchange plans if, after the fact, their incomes are not what they suggested? Is anyone checking this year?

So, in addition to the 29ers and the 49ers across America in 2014 – 2015, will we now see some 101%ers?

Kaiser Georgia February 27, 2014 at 12:34 am

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