Table 3 reports how often each of the 23 million transitions was followed by a second transition within the next four months--that is, by the next SIPP interview--and the frequency with which the initial transitions were reversed by these second transitions. Altogether, 40 percent of the 23 million transitions were followed by a second transition within the next four months, and 33 percent were reversed. 9, 10 Thus more than four-fifths of the second transitions (32.6 divided by 40.3) involved a reversal of the initial transition.
|Type of Transition||Annual
|Outcome of Second Transition|
|New Coverage Status|
|Total Number of Transitions||23,325,000||40.3||32.6|
|Transitions from ESI to:||7,178,000||54.2||45.5|
|Transitions from Uninsured to:||7,830,000||32.7||26.2|
|Transitions from Medicaid to:||5,879,000||37.9||28.2|
|Transitions from Other Insurance to:||2,438,000||30.0||25.2|
|SOURCE: Survey of Income and Program Participation, 1992 Panel.|
The frequency with which transitions were followed by second transitions varied with the type of transition. Children leaving ESI were the most likely to have a second transition--54 percent of the time--and the most likely to reverse the initial transition--about 46 percent. Children leaving any of the other three coverage statuses were much less likely to have second transitions--30 to 38 percent--and much less likely to reverse their initial transitions--25 to 28 percent. The frequency of second transitions showed marked variation depending on the destination of the initial transition, however. Children who moved into ESI were the least likely to have a second transition, with probabilities ranging from 23 to 24 percent. Children moving into other insurance, on the other hand, were as likely to have a second transition as children leaving ESI, with probabilities ranging from 49 to 59 percent. Children moving to Medicaid from other insurance or no insurance had intermediate probabilities of experiencing second transitions, but it is noteworthy that the single transition with the highest probability of being followed by a second transition and the highest probability of being reversed was the transition from ESI to Medicaid. For these transitions, 64 percent were followed by a second transition within four months, and 55 percent were reversed. In short, transitions from ESI to Medicaid were exceedingly temporary. At the same time, transitions in the reverse direction--from Medicaid to ESI--were the most long-lived. Only 23 percent of the children who moved from Medicaid to ESI had a second transition in the next four months, and less than 16 percent returned to Medicaid within that time frame.
Only two types of initial transitions were more likely to be followed by a transition to a third coverage status than a return to the original status. Children who left Medicaid for other insurance had a 59 percent chance of having a second transition within four months, but less than 18 percent returned to Medicaid. Instead, nearly 19 percent obtained ESI, and 23 percent became uninsured. Children who made the reverse transition initially--that is, they moved from other insurance to Medicaid--had a 40 percent chance of making a second transition within four months, but less than 16 percent returned to other insurance. All of the remainder, or about 25 percent, became uninsured. Both types of transitions were quite rare, however, and the sample sizes on which these estimates are based are quite small (see Table 2A).
It is of particular interest how often children who became uninsured had a second transition and became covered again within four months. Depending on the original coverage (ESI, Medicaid, or other insurance), between 44 and 50 percent of the children who lost coverage regained some form of coverage within four months. 11 At least three-quarters of these children returned to the same coverage that they had prior to becoming uninsured.
If all initial transitions were ultimately reversed, we would expect to observe that about one-half of our sample transitions were reversed. The other half would be secondary transitions and, therefore, not followed by reversals. Looking only four months ahead, we find that nearly half of all transitions out of ESI were reversed but only somewhat more than a quarter of other transitions. Because of the seam bias, we would have to look an additional four months ahead to see appreciably more reversals--if indeed there are many more--and for much of our sample of transitions this would take us beyond the end of the 1992 panel. Nevertheless, from what we observe we can conclude that children's reversing their transitions does indeed help to explain why we see nearly equal flows backwards and forwards between any given pair of coverage statuses. Yet the differences in the rates at which particular transitions were reversed indicate that reversals alone cannot explain the near equivalence of most forward and backward transition rates. The dynamics of transitions between types of health insurance coverage are too complex to be summarized so simply.