Private health insurance plans in 1978 and 1979: a review of coverage, enrollment, and financial experience.

The private health insurance industry collected $55.9 billion in premiums in 1979 and returned $50.2 billion in benefits to its subscribers. Premiums rose 12.4 percent, slightly faster than in 1978 when premiums rose 11.4 percent, to $49.7 billion. Benefits rose 11.4 percent in 1979, down from the 12.6 rate in 1978. After operating expenses were deducted, the industry showed underwriting losses of $1.4 billion in 1979 and $1.5 billion in 1978. About 78 percent of the population was insured for hospital care, 76 percent for x-ray and laboratory examinations, and about 76 percent for surgical services in 1979. Smaller percentages had coverage for other types of care. An estimated 64 percent of the aged bought private hospital insurance, and about 43 percent bought surgical insurance, mostly to supplement Medicare benefits. An estimated 12 percent of persons under age 65 had no protection against the cost of hospital care either through private insurance or a public program such as Medicare or Medicaid.     

Medicare beneficiaries less likely to experience cost- and access-related problems than adults with private coverage

The experiences of people covered by Medicare and those with private employer insurance can help inform policy debates over the federal budget deficit, Medicare's affordability, and the expansion of private health insurance under the Affordable Care Act. This article provides evidence that people with employer-sponsored coverage were more likely than Medicare beneficiaries to forgo needed care, experience access problems due to cost, encounter medical bill problems, and be less satisfied with their coverage. Within the subset of beneficiaries who are age sixty-five or older, those enrolled in the private Medicare Advantage program were less likely than those in traditional Medicare to have premiums and out-of-pocket costs exceed 10?percent of their income. But they were also more likely than those in traditional Medicare to rate their insurance poorly and to report cost-related access problems. These results suggest that policy options to shift Medicare beneficiaries into private insurance would need to be attentive to potentially negative insurance experiences, problems obtaining needed care, and difficulties paying medical bills.     

Reflections on the role of less-than-comprehensive (exclusionary) private health insurance hospital products in the Australian healthcare system

The number of people in Australia that are currently covered by a hospital private health insurance product continues to rise every quarter. In September 2010, for the first time since the introduction of the public universal social insurance scheme, Medicare, more than 10million persons in Australia are covered by private health insurance. Although the number of persons covered by private health insurance continues to grow, the quality and level of cover that members are holding is changing significantly. In an effort to limit premium rises and to reduce the benefits paid for treatment, private health insurers have introduced, and moved a large number of existing members to, less-than-comprehensive private health insurance policies. These policies, known as 'exclusionary' policies, are changing the dynamics of private health insurance in Australia. After examining the emergence and prevalence of these products, this commentary gives three different examples to illustrate how such products are changing the nature of private health insurance in Australia and are now set to create a series of policy issues that will require future attention.     

Trends in the golden state: small-group premiums rise sharply while actuarial values for individual coverage plummet

Using multiple databases, this paper examines recent trends in the affordability and comprehensiveness of small-group and individual health insurance markets in California. Both became less affordable over the study period. In 2006, a single person age 32-52 earning the median income who purchased individual insurance spent on average 16 percent of income on premiums and out-of-pocket medical expenses. For individual insurance, the share of medical expenses paid by insurance as opposed to patients declined from 2002 to 2006. In the small-group market, premiums rose more than 50 percent from 2003 to 2006, but the proportion of claims paid by insurers for a standardized population remained constant.     

Health insurance in China and India: segmented roles for public and private financing

Surveys suggest that over the past five to ten years, the amount of health insurance premiums collected has grown at an average rate of 34 percent in India and 43 percent in China. A variety of public and private insurance schemes play important roles in enabling health care provision for unique populations in these two countries. This paper provides an overview of the trends in health insurance as a financing mechanism for health care in China and India. It suggests a broad policy approach to aligning and mobilizing forces that would allow segmented expansion of public and private health insurance.     

Estimation of a hedonic pricing model for Medigap insurance

OBJECTIVE: This paper uses a unique database to examine premiums paid by beneficiaries for Medigap supplemental coverage. Average premiums charged by insurers are reported, as well as premiums by enrollee age and gender, and additional policy characteristics. Marginal prices for Medigap benefits are estimated using hedonic price regressions. In addition, the paper considers how additional policy characteristics and geographic differences in the use and cost of medical care affect premiums. DATA SOURCES/STUDY SETTING: A comprehensive database on premiums paid by beneficiaries for newly issued Medigap policies in the year 2000 along with state-level characteristics. STUDY DESIGN: Hedonic pricing equations are used to estimate implicit prices for Medigap benefits. DATA COLLECTION/EXTRACTION METHODS: The Centers for Medicare & Medicaid Services contracted for the creation of a detailed database on Medigap premiums. Data were collected in three stages. First, letters were sent directly to insurers requesting premium data. Second, letters were directly to state insurance commissioner's offices requesting premium data. Last, each state insurance commissioner's office was visited to collect missing data. PRINCIPAL FINDINGS: With the exceptions of the part B deductible and drug benefit, Medigap supplemental insurance is priced consistent with the actuarial value of benefits offered under the standardized plans. Premiums vary substantially based on rating method, whether the policy is guaranteed issue, Medigap Select, or explicitly for smokers. Premiums increase with enrollee age, but do not vary between men and women. The relationship between premiums and enrollee age varies across rating methods. Attained-age policies show the strongest relationship between age and premiums, while community-rated premiums, by definition, do not vary with age. Medigap supplemental insurance premiums are higher in states with poorer health, greater utilization, and greater managed care penetration. CONCLUSIONS: Despite the high cost, Medigap plans are generally priced in accordance with the actuarial value of benefits. The primary exception is the drug benefit, which appears to be subject to substantial adverse selection. Benefits such as the part B deductible and at-home recovery benefit offer little value to consumers. Several states require insurers to community rate premiums. Such regulation has important implications for premiums, and research needs to consider the impact of such regulation on the Medigap market.     

Consumer information and biased selection in the demand for coverage supplementing Medicare.

This study examines how the relationship between health insurance knowledge and the health status of health insurance consumers influences their decisions to purchase insurance coverage. Data from the federal Medicare health insurance program for the elderly in the United States are used. The basic Medicare program provides a limited amount of coverage for health care services obtained from any provider in the private fee-for-service (FFS) market. Beneficiaries of this program may choose to supplement the basic coverage which they receive by two mechanisms: either they may purchase private insurance designed to fill some of the gaps left by the federal program ('Medigap' policies), thereby remaining in the FFS market and preserving their choice of provider, or they may enroll in health maintenance organizations (HMOs), thereby leaving the FFS market and agreeing to use only those providers affiliated with the HMO, and in return receiving broader coverage at little additional out-of-pocket cost. The study was made possible by a unique data set which combines measures of beneficiary knowledge of Medicare coverage with measures of perceived health status, socio-economic characteristics, and insurance coverage choices for a sample of Medicare beneficiaries who participated in an educational workshop about their insurance coverage options. These data were used to estimate a multinomial logistic model of the determinants of insurance choices, where the options included the two listed above and a basic Medicare option. The study explicitly recognizes the interaction between insurance information and health status in health plan choice. These results show that knowledge of coverage does have a differential impact on the decision to purchase health insurance depending on health status. With a high level of knowledge, sicker beneficiaries are less likely to have basic Medicare alone, compared with HMOs or Medigap policies, while healthier beneficiaries are less likely to be enrolled in HMOs, compared with Medigap policies. This finding has important implications for the use of health status measures to adjust capitated payment formulas when knowledgable consumers have the option to enroll in HMOs or remain in the FFS environment. In the absence of health status adjusters for the HMO capitation payments, high levels of coverage knowledge may exacerbate inherent selection bias among these coverage options by healthier and sicker consumers of health insurance.     

Health Care Expenditures for Urban and Rural Veterans in Veterans Health Administration Care

Objective. To compare Veterans Health Administration (VA) patients, non-VA-using veterans, and nonveterans, separated by urban/rural residence and age group, on their use of major categories of medical care and payment sources.
Data Source. Expenditures for health care–using men in Medical Expenditure Panel Surveys from 1996 through 2004.
Study Design. Retrospective, cross-sectional analysis.
Data Collection/Extraction Methods. Controlling for demographics, health status, and insurance, we compared groups on population-weighted expenditures for inpatient, hospital-based outpatient, office-based, pharmacy, and other care, by major payers (self/family, private insurance, Medicare, other sources, and VA).
Results. VA users received most of their health care outside of the VA system, paid through private insurance or Medicare; self-payments were substantial. VA users under 65 reported worse health if they were rural residents but also lower expenditures overall and less care through private insurance.
Conclusions. VA health care users get most of their medical care from non-VA providers. Working-age VA users have less insurance coverage and rely more on VA care if they live in rural areas.     

Why more cost-sharing won't slow Medicare spending

In considering ways to slow the growth in Medicare expenditures, policymakers have concluded that increasing point-of-service cost-sharing for patients will reduce demand for health services. Under the current system, Medicare beneficiaries faced with increased cost-sharing can reduce their demand for services or purchase additional private insurance. New data from the 1991 Medicare Current Beneficiary Survey show that high-income persons protect themselves from out-of-pocket costs by purchasing private supplemental insurance. Surprisingly, the data also reveal that many low-income persons also purchase private insurance, demonstrating that the elderly--whatever their income level--consider supplementary insurance more of a necessity than a luxury. Thus, it appears that increased beneficiary cost-sharing would have a limited effect on Medicare spending growth.     

The Effect Modification of Supplemental Insurance on the Relationship Between Race and Bone Mineral Density Screening in Female Medicare Beneficiaries

To determine the effect modification of supplemental insurance on the relationship between race and bone mineral density (BMD) in female Medicare beneficiaries. Retrospectively analyzing hospital administrative claim and clinical data of female Medicare beneficiaries (n?=?1,398), we performed multivariate logistic regressions of BMD testing including data from all study participants and the subsets of health insurance. Significantly fewer Black than White female Medicare beneficiaries received the BMD testing in the overall sample (odds ratio, OR?=?0.63; p?=?0.02) and those without supplementary health insurance (n?=?709; OR?=?0.38; p?=?0.004). By contrast, the magnitude of this racial disparity in the BMD testing was diminished among those with supplementary private health insurance (n?=?689). We found a significant racial disparity in BMD testing for Black and White female Medicare beneficiaries. This disparity became more pronounced among those without supplementary private health insurance.     

Evidence of cost shifting in California hospitals

We used 1993-2001 data from private hospitals in California to investigate whether decreases in Medicare and Medicaid prices were associated with increases in prices paid for privately insured patients. We found that a 1 percent relative decrease in the average Medicare price is associated with a 0.17 percent increase in the corresponding price paid by privately insured patients; similarly, a 1 percent relative reduction in the average Medicaid price is associated with a 0.04 percent increase. These relationships imply that cost shifting from Medicare and Medicaid to private payers accounted for 12.3 percent of the total increase in private payers' prices from 1997 to 2001.     

The effectiveness of consumer choice in the Medicare supplemental health insurance market.

This article examines the factors that affect Medicare beneficiaries' choices in the supplemental health insurance market. Data include detailed survey information as well as copies of the health insurance policies owned by a sample of approximately 2,500 Medicare beneficiaries in six states during 1982. Logit analysis is employed to analyze the determinants of four dependent variables: whether a person owns (1) one or more private supplemental insurance policies, (2) two or more policies, (3) at least one policy that we define as "effective," and (4) a policy we define to be "less effective." Those who are better off from a socioeconomic standpoint appear to be making more effective choices in the supplemental health insurance market. However, there does not appear to be a relationship between consumer ignorance or vulnerability and the purchase of multiple supplemental insurance policies. Study results imply an important role for public policy in helping to provide the information necessary to ensure that the most vulnerable beneficiaries make insurance choices that are in their best interest.     

Designing health insurance information for the Medicare beneficiary: a policy synthesis.

Can Medicare beneficiaries make rational and informed decisions about their coverage under the Medicare program? Recent policy developments in the Medicare program have been based on the theory of competition in medical care. One of the key assumptions of the competitive model is the free flow of adequate information, enabling the consumer to make an informed choice from among the various sellers of a particular product. Options for Medicare beneficiaries in supplementing their basic Medicare coverage include the purchase of private supplementary insurance policies or enrollment in a Medicare HMO. These consumers, in a complex health insurance market, have only limited information available to them because many health plans do not make adequate comparable product information available. Moreover, since the introduction of the Medicare HMO option, the long-range plan for management of the Medicare budget has become based on the large-scale voluntary enrollment of beneficiaries into capitated health plans. The policy instrument that has been used to improve beneficiary decisions on how to supplement Medicare coverage is the informational or educational program. This synthesis presents findings regarding the relative effectiveness of different types of health insurance information programs for the Medicare beneficiary in an effort to promote practical use of the most effective types of information.     

Access to ambulatory care among noninstitutionalized, activity-limited persons 65 and over.

This study examined the impact of income and insurance type on ambulatory care contact use by persons 65 and over who expressed a limitation in their activity. This large group (39% of noninstitutionalized older persons in 1984) had significantly more health problems and ambulatory care contacts than persons not activity-limited. The only previous study on equity in use of physician services among elderly in poorer than average health found relatively little inequality of use due to income and insurance. This study came to the opposite conclusion. Activity-limited persons without Medicare private supplementary insurance, as well as those with supplementary insurance in the bottom and middle of the income distribution, had 15-32% fewer ambulatory care contacts than activity-limited persons with higher income and private supplementary insurance. Particularly striking were the declines in consumption among middle income persons relative to the reference group, indicating that the issue of equity in consumption of health services among older disabled persons affects a much broader group than only the poor and near-poor.     

Integrating smoking control policies into employee benefits: a survey of large California corporations.

OBJECTIVES. Public health policy promotes the use of risk-rating health insurance and payment for smoking cessation as economic incentives to encourage smoking cessation. This study was undertaken to learn more about the adoption of these policies in large corporations. METHODS. A random sample survey of 280 private California corporations with more than 500 employees was undertaken to document the prevalence of policies integrating smoking control into employee benefit designs. RESULTS. Only 8.6% of large corporations had ever considered risk-rating health insurance premiums using smoking status and only 2.15% had implemented a risk-rating policy. Nearly 20% of the companies offered health insurance plans that covered smoking cessation services. Subsidization or payment for smoking cessation outside health insurance was provided by over 37% of the companies surveyed, and 87% had adopted formal work-site smoking policies. CONCLUSION. Benefit policies that provide financial support to smokers to participate in smoking cessation services are much more prevalent and are viewed more positively by the benefits managers in large corporations than are policies to risk-rate health insurance premiums on the basis of smoking.     

Health insurance in South Africa: an empirical analysis of trends in risk-pooling and efficiency following deregulation

This paper reports an empirical investigation into the pattern of private health insurance coverage in South Africa before and after deregulation of the health insurance industry. More specifically, we sought to measure trends in risk-pooling over the period 1985-95, and to assess the impact of risk pooling on the costs of health insurance cover over this period. South African mutual health insurers (Medical Schemes) have existed for over 100 years, and have been regulated under a specific Act since 1967. Up until 1989, health insurers were required by law to community rate their premiums, and were not allowed to exclude high-risk enrolees from cover. In 1989 these regulations were removed, effectively allowing health insurers to risk-rate the cover which they provided, and exclude 'medically uninsurables'. Data were obtained from the office of the health insurance regulator (the Registrar of Medical Schemes) for the period 1985-95, and consisted of the statutory returns from all registered medical schemes for each year during the study period. Multiple regression methods were used to assess the determinants of changes in the risk pools of insurers, and their costs. Both cross-sectional and longitudinal models were estimated. Unadjusted data suggest changes in risk-pooling since the deregulation period after 1985. Health insurers with open enrolment had worse than average risk profiles in the 1980s, but this reversed by the early 1990s, leaving them with significantly better risk profiles by 1995. Worsening risk profiles were associated with decreasing fund size, higher loss-ratios and past premium increases. Most models showed that risk rating of premiums was consistently associated with higher premiums, after adjustment for risk, quality, scale and other environmental differences between insurers. Likely explanations include the additional costs required for marketing and underwriting risk-rated policies, insufficient incentives to use cost-control techniques, and higher levels of moral hazard associated with diminished risk-pooling. Current re-regulation of risk-pooling within medical schemes may thus improve both equity and efficiency of private health care cover.     

Health insurance and the elderly: data from MCBS (Medicare Current Beneficiary Survey)

This article shows the supplemental insurance distribution and Medicare spending per capita by insurance status for elderly persons in 1991. The data are from the Medicare Current Beneficiary Survey (MCBS) and Medicare bill records. Persons with Medicare only are a fairly small share of the elderly (11.4 percent). About three-fourths of the Medicare elderly have some form of private insurance. The share with Medicaid is 11.9 percent, which has increased recently as qualified Medicare beneficiaries (QMBs) started to receive partial Medicaid benefits. In general, Medicare per capita spending levels increase as supplemental insurance comes closer to first dollar coverage. When the data were recalculated to control for differences in reported health status between the insurance groups, essentially the same spending differences were observed.     

Insurance Disruption due to Spousal Medicare Transitions: Implications for Access to Care and Health Care Utilization for Women Approaching Age 65

Objective. To assess whether a husband's Medicare transition leads to insurance disruptions for his wife that impact her perceived access to care, health care utilization, or health status.
Data Sources/Study Setting. Respondents were married women under age 65 from the 2003–2005 round of the Wisconsin Longitudinal Study ( N =655).
Study Design. Instrumental variable (IV) linear and IV-probit analyses provided unbiased estimates of the effect of an insurance disruption on study outcomes. The instrument was the husband's age: (1) women with husbands who transitioned to Medicare within the previous year (age 65–66); (2) women with husbands who did not transition (60 Data Collection/Extraction Methods. Respondents were surveyed via telephone and mail.
Principal Findings. After adjustment, women who experienced an insurance disruption due to their husband's Medicare transition had a greater probability of experiencing a change in usual clinic/provider (71 percent), delaying filling or taking fewer medications than prescribed because of cost (75 percent), going to the emergency room (52 percent), and had lower average mental health scores than women who did not experience an insurance disruption.
Conclusions. Despite consistent insurance coverage, the insurance disruption that accompanies a spouse's Medicare transition has adverse access and health care utilization consequences for women.     

Evidence of the public-private mix in healthcare systems in countries with duplicated coverage: greater inequities and segmentation in National Health Systems

This paper seeks to identify the potential negative effects of private health insurance on the universality of National Health Systems. It systematizes the operational concepts of the public-private mix model and presents the results from international research into duplicated and supplementary coverage that shows that universality is negatively affected by inequities derived from duplicated coverage though not from supplementary coverage. It demystifies the supplementary nature of private health insurance as the villain in the Brazilian healthcare system and recommends that public policies should be fully oriented to improving the public health system instead of private health insurance.