Policymakers are constantly struggling with the issue of how to increase access to publically funded medical care and improve health while, at the same time, controlling costs. Researchers have found that premium increases do have an effect on a family’s choice to exit public coverage, which adds to the problem of how to control costs without placing limits on accessibility.
Health economist James Marton, an associate professor at the Andrew Young School of Policy Studies, has conducted studies to estimate the sensitivity of near-poor and moderate-income families to premium increases in their children’s health insurance; specifically, their decision whether to keep their children under public health coverage or to drop it.
He and his colleagues published their findings in the article, “Estimating Premium Sensitivity for Children’s Public Health Insurance Coverage: Selection but No Death Spiral” (Health Services Research, 2014). Additional authors include assistant research professor Angela Snyder and senior research associate Mei Zhou from the Georgia Health Policy Center, Patricia Ketsche from the J. Mack Robinson College of Business, and Kathleen Adams from Emory University.
The purpose of the paper is to do a better job than what typically has been done in past literature to estimate how families with children in public health insurance plans react to premium increases.
Marton believes everyone benefits when policymakers have an accurate assessment of how premium changes impact public health coverage enrollment. “It aids their ability to evaluate the trade-off between the additional revenue generated by a premium increase and the potential reduction in coverage such a change generates,” he says. “When discussing public health policies, it is important to remain unbiased and let the data speak for itself.”
For their research, the authors examined the enrollment, eligibility and claims data for Georgia’s PeachCare for Kids (CHIP) program over the course of several years.
They found that a dollar increase in the per-child premium was associated with a slight increase in a typical family’s decision to exit coverage. They also found that families with children with minor illnesses, like a common cold once or twice a year, were more likely to exit coverage than those with children who had histories of moderate to severe illnesses.
However, they also found the decision whether to enroll when premiums increased similar across all three illness levels. “We found that a premium increase of $15 per member per month led to decreased enrollment by these families at nine percent (minor illnesses), 10 percent (moderate) and nine percent (severe).
These results have implications for children and adults who are covered in public or private insurance plans, Marton says. However, further research is needed to see if adults enrolled through the Affordable Care Act will respond to premium changes in the same manner as the families in this study.
Find a copy of the article at http://www.ncbi.nlm.nih.gov/pubmed/25130764.