Everything following this line is a direct quote from the source linked at the bottom:Increasing Health Insurance Premiums and the Decline in Insurance Coverage.
Chernew M, Cutler D, Keenan P; AcademyHealth. Meeting (2004 : San Diego, Calif.).
Abstr AcademyHealth Meet. 2004; 21: abstract no. 989.
Department of Health Management and Policy, University of Michigan School of Public Health , 109 S. Observatory Street , Ann Arbor, MI 48109-2029 Tel. 734.936.1193 Fax 734.764.4338
This paper examines the determinants of declining insurance coverage during the 1990s, with a focus on the role of rising health care premiums, relative to other explanations such as changes in employment patterns or state policies. In contrast to substantial media coverage linking rising premiums to declines in coverage rates, empirical evidence quantifying the extent to which higher premiums deter coverage is limited.
We take advantage of wide geographic variation in changes in premiums and coverage rates to estimate the association between rising local health insurance costs and the falling propensity for individuals to have any health insurance coverage. We focus on coverage from any source (private or public), because some individuals may switch their source of coverage rather than become uninsured.
Using probit regression models and instrumental variable techniques, we analyze changes in coverage between two periods, 1989-1991 and 1998-2000, using the March Current Population Survey (CPS). We estimate the impact of changing health care costs, tax subsidies, Medicaid reforms, other state regulatory reforms, a rise in spousal employment and general economic conditions on declining coverage, controlling for changes in population demographics.
Our contributions, relative to the existing literature, include more detailed controls for non-premium explanations for declining coverage, focus on any coverage (as opposed to employer sponsored coverage), use of geographic variation in cost growth (as opposed to national trends in cost growth that may be confounded by other factors), a broader measure of health care costs, and recognition of the endogeneity of cost growth.
The non-elderly population of the United States residing in 64 MSAs.
PRINCIPAL FINDINGS:Over half of the decline in coverage rates experienced over the 1990s is attributable to the increase in health insurance premiums (1.6 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. Effects of rising premiums on coverage declines are greater for individuals in families with lower as opposed to higher education, and for younger as opposed to older adults.
As other studies have found, changing demographics and employment patterns explain little of the decline in coverage. Instead, much of the decline in coverage over the 1990s appears to be related to the rise in health care premiums.
IMPLICATIONS FOR POLICY, DELIVERY OR PRACTICE:
The uninsured population is likely to increase further if health care cost growth continues to exceed income growth. Initiatives aimed at reducing the number of uninsured must confront the growing pressure on coverage rates generated by rising costs. At the same time, while policy has traditionally focused on the need to limit the growth of costs, this may not be desirable if medical cost increases are buying valuable services. A careful examination of how to encourage optimal design of insurance policies and delivery of medical care is warranted.http://gateway.nlm.nih.gov/MeetingAb...103624023.html