The Effects of Trigger Events on Changes in Children's Health Insurance Coverage. A. Introduction


Data from repeated cross-section surveys such as the Current Population Survey (CPS) or the National Health Interview Survey (NHIS) show little year-to-year change in the proportion of children who are without health insurance or the proportion who are covered by specific types of insurance, even when there are clear upward or downward trends. The modest year-to-year change in the aggregate distribution of health insurance coverage among children masks a substantial amount of movement among coverage statuses by children each year, however. We present evidence that in the one-year period from July 1993 through June 1994 there were more than 23 million instances of children changing their coverage among major types of insurance or between covered and uninsured--nearly one change for every three children. What accounts for these frequent changes in coverage? This report examines the role of "trigger events"--primarily changes in the family economic situation or family composition--in bringing about these changes in health insurance coverage. In short, we ask whether there are other changes in the family that may help to explain the occurrence of these changes in coverage or their timing. We examine a broad spectrum of changes in coverage rather than focusing on a small set of transitions so that we can better understand how particular changes fit into the big picture of health insurance dynamics and so that our findings with regard to particular transitions can be informed by what we observe for other types of transitions.

We focus on trigger events rather than personal characteristics that may predispose children to greater or lesser probabilities of change because of their potential to explain both the volatility of health insurance coverage for a segment of the population and perhaps the trends in aggregate coverage as well. The trigger events that we examine include changes in parents' employment status, jobs, and hours worked; changes in AFDC recipiency; large swings in family income; and changes in family headship and family size. A notable exclusion from the types of events that we could examine is change in the availability and costs to employees of family coverage offered by employers. Data of this kind were not collected in the earlier SIPP panels, and the limited information that is being collected in one wave of the latest (1996) SIPP panel has not yet been released. Moreover, there are no nationally representative data that would allow us to look at change in the coverage offered by parents' employers as a factor in the gain or loss of employer-sponsored coverage for children.

The report is organized as follows. In Section B we describe our data source and the methodology that we use to identify trigger events and estimate their relative influence. Section C presents estimates of the frequency of different types of transitions in health insurance coverage among children, and Section D examines how often parents exhibit the same transitions as their children. Section E provides estimates of the frequency of prior events that may help to trigger the transitions documented in Section C. Section F analyzes the effects of trigger events, and Section G discusses the implications of our findings and summarizes our key conclusions.

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