# Analysis of Children's Health Insurance Patterns: Findings from the SIPP. 1. New Spells

Table 1 describes the duration of spells of uninsurance that began during FY93. For all of these spells, the first set of columns in Table 1 gives the distribution of completed duration in single months, up to a maximum of 13 or more. For most of this last category we did not observe the spell completion; we know only that these spells lasted at least 13 months. We combine all spells of 13 months or greater because 13 is the longest duration that we can observe with the SIPP panel for a spell starting in the final month of FY93. To produce representative estimates of longer durations, we must limit our sample to spells starting earlier in the year. For spells starting in the first six months of FY93, therefore, the second set of columns in Table 1 reports completed durations up to 19 months or more.1

TABLE 1: SPELLS OF UNINSURANCE STARTING IN FY93 BY COMPLETED DURATION IN MONTHS
Spells Starting 10/92 to 9/93 Spells Starting 10/92 to 3/93
Completed Duration of Spell Number Percent Cumulative Percent Number Percent Cumulative Percent
All Spells 9,205,000 100   4,094,000 100
1 Month 683,000 7.4 7.4 204,000 5 5
2 Months 638,000 6.9 14.3 302,000 7.4 12.4
3 Months 485,000 5.3 19.6 211,000 5.2 17.5
4 Months 3,166,000 34.4 54 1,375,000 33.6 51.1
5 Months 299,000 3.2 57.3 217,000 5.3 56.4
6 Months 223,000 2.4 59.7 123,000 3 59.4
7 Months 237,000 2.6 62.3 66,000 1.6 61
8 Months 798,000 8.7 70.9 449,000 11 72
9 Months 57,000 0.6 71.5 25,000 0.6 72.6
10 Months 78,000 0.9 72.4 22,000 0.5 73.2
11 Months 108,000 1.2 73.6 56,000 1.4 74.5
12 Months 584,000 6.3 79.9 210,000 5.1 79.7
13+ Months 1,848,000 20.1 100 833,000 20.3 100
13 Months       6,000 0.1 79.8
14 Months       22,000 0.5 80.3
15 Months       28,000 0.7 81
16 Months       128,000 3.1 84.2
17 Months       5,000 0.1 84.3
18 Months       8,000 0.2 84.5
19+ Months       636,000 15.5 100
SOURCE: Survey of Income and Program Participation, 1992 Panel.

Perhaps the most striking feature of these distributions is the heaping of reported durations at four months. Of the 9.2 million spells that began in FY93, more than one-third were completed in exactly four months. This is not a true reflection of spell durations but a phenomenon of the measurement process in the SIPP. This heaping of responses at four months, and to a lesser degree at multiples of four months (there are local peaks at 8, 12, and 16 months), is the result of a “seam effect.” As we mentioned above, SIPP respondents are interviewed every four months and asked extensive questions about their circumstances in each of the four preceding months. For reasons that are not fully understood, transitions in many characteristics are reported as occurring dispro- portionately between the four-month reference periods of interviews--that is, at the seams--rather than within these reference periods. It happens that this seam effect is particularly strong for transitions into and out of insurance coverage. For example, while we would expect only one quarter of new spells of uninsurance to begin in the first month of a reference period or end in the last month, 75 to 90 percent of new spells are reported as beginning in the first month or ending in the fourth month. The transitions, in other words, are reported to have occurred between the reference periods of the interviews. Explanations for this phenomenon include genuine recall error as well as various kinds of behaviors that respondents or interviewers may engage in to speed up or simplify the interview. Clearly, treating the previous four months as a single reporting period--for at least some kinds of responses--simplifies the interview, but if that is what is happening in the reporting or recording of health insurance coverage, then we have to interpret the data accordingly.

Because of the staggered interviewing, described earlier, the seam effect does not show up in the estimates reported for calendar months. But this is not to say that the seam effect does not influence the overall magnitude of these calendar month or point-in-time estimates. Unless respondents (or interviewers) are as likely to “round up” or “round down” their reported months of participation in a reference period, the monthly estimates of aggregate participation will be affected. In a later report, we consider how the seam effect might affect estimates of the number of children who are uninsured.

The seam effect is not unique to SIPP, by any means, and the research that preceded the initiation of the first SIPP panel in 1984 included an examination of this phenomenon. Panel surveys with annual interviews find the same problem when they attempt to measure monthly behavior. To the extent that recall error contributes to the seam effect in SIPP, the impact of such error will be magnified in surveys that attempt to measure behavior over longer periods of time--such as an entire year, which is the reference period for much of the data collected in the March supplement to the Current Population Survey (CPS). Indeed, the fact that CPS estimates of the number of people who had no health insurance coverage during the previous calendar year resemble point-in-time estimates more closely than they resemble the calendar year estimates produced by panel surveys is indicative of a serious response problem that may share some underlying causes with the SIPP seam effect.

Nevertheless, it is clear that we have to take account of the seam effect when we interpret data on spell durations, such as those reported in Table 1. Estimates of the duration of completed spells reflect the maximum impact of the seam effect because each reported spell is subject to this influence at both ends. Of the nearly 3.2 million spells of uninsurance reported as being completed in exactly four months, how many were really completed in four months, and how many were completed in three or five months, two or six months, or even one month or seven months? And how many spells of one, two, or even three months duration were not reported at all?

While there may be ways to tease out more information from the SIPP data, we have not attempted to do so here.2 Instead we simply recognize the limitations of these data. Specifically, despite what the SIPP data appear to tell us about the length of short spells of uninsurance, we would suggest that these data should not be used to draw inferences about the relative frequency of spell lengths shorter than six months or about longer spell lengths in groupings of fewer than four months. In other words, it may be reasonable to infer from Table 1 that about 60 percent of new spells of uninsurance in FY93 were completed in six months or less, but the data will not support inferences about how many of these spells may have been completed in two months or less, or four months or less. Similarly, it may be correct to infer that about 8 percent of spells lasted 9 to 12 months or that 3.5 to 4 percent lasted 15 to 18 months but certainly not that only .1 percent were completed in exactly 13 months. In general, we need to be conscious that the numbers reported at 4 months, 8 months, 12 months, or 16 months almost certainly include more spells of shorter or longer lengths than they do spells of the nominal length.

Spell lengths of six months or longer or 12 months or longer are becoming important in defining eligibility for CHIP coverage in a number of states. What can we infer about the relative frequency of such spells from the data presented in Table 1? Read literally, the data in Table 1 tell us that about 43 percent of the spells that began in FY93 lasted six months or longer (100 minus the 57.3 percent with lengths of five months or less), and 26.4 percent of the new spells in that year lasted 12 months or longer. Recognizing that most of the spells reported as having durations of exactly four or 12 months were actually longer or shorter than that, we would suggest that the true proportion of new spells with durations of six months or longer could be as much as 5 percentage points higher--up to 48 percent--and that the true proportion of spells with durations of 12 months or longer could be 2 to 3 percentage points lower than the observed figure, or closer to 24 percent.

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